ARA Services Corporation Files Chapter 11 Bankruptcy
Chicago, IL - ARA Services Corporation (ARASC) has voluntarily filed for protection under Chapter 11 of the U.S. Code in the U.S. Federal Court for the Northern District of Illinois.
ARASC will continue to provide reliable service to customers. ARASC has sufficient cash balances to fund operations during the anticipated restructuring period.
"Our inherited business model and capital structure did not permit us to make adequate change in the market. Bearing the economic burden for auto recyclers‚ computers and Internet service contracts proved to be detrimental to our bottom line. The steps we are taking today will provide us with the flexibility and time to explore all strategic alternatives while we continue to deliver the reliable service upon which our customers depend," said Michael T. Quintos, President and Chief Executive Officer of ARASC. ARASC will emerge as a stronger, more competitive company in weeks, not months or years."
The reorganization affords ARASC the flexibility to launch their next generation product suite, including salvage auction purchasing online, personalized web pages, expanded PartsOnline capabilities and inventory management reports.
"We are asking the Courts for the flexibility to do what is best for ARASC shareholders and ARASC customers." Mr. Quintos said. He added that, ARASC intends to work through the Courts to maximize the value for creditor constituencies. ARASC intends to pay vendors on a timely basis for goods and services they deliver after the filing date.