Coyne Textile seeks bankruptcy protection, prepares to sell operating units

SYRACUSE, N.Y. — Coyne International Enterprises Corp., a Syracuse–based commercial laundry service company, has filed for chapter 11 bankruptcy protection as it reorganizes its finances.

Coyne submitted the filing as it also works to complete three planned sales of its operating units, according to a news release the company issued on Saturday.

The firm, which does business as Coyne Textile Services, filed for bankruptcy on Friday in the U.S. Bankruptcy Court for the Northern District of New York in Syracuse.

It operates at 140 Cortland Ave. in Syracuse. Coyne provides uniform sales and rental services, along with laundry services to more than 10,000 customers in a “wide variety of industries.”

Pending the completion of the sales, Coyne will continue to operate under the Bankruptcy Court’s supervision. Coyne’s current management team will continue to lead the company throughout this process.

“The filing was necessary to preserve the value of Coyne’s business and allow us to complete our asset sales,” Mark Samson, Coyne’s CEO, said in the release. “All our efforts are focused on concluding this process in an efficient and successful manner. Coyne intends to work with all of our stakeholders to maximize the value of our assets.”

The company employs about 620 people at its nine locations. Under the three proposed sales, seven of Coyne’s nine locations will remain open, preserving about 525 jobs.

Coyne plans to sell its New Bedford, Massachusetts location to Clean Uniforms and More!, which is headquartered in the same community, according to its website.

Coyne also plans to sell its Richmond, Virginia and Greenville, South Carolina locations to Irvine, California–based Prudential Overall Supply.

Coyne’s existing senior-management team will acquire the remaining plants and service centers in locations that include Syracuse; Buffalo; Bristol, Tennessee; Cleveland, Ohio; London, Kentucky; and York, Pennsylvania, according to the release.

The company generated revenue of $66.2 million in fiscal year 2014, which was down from the $77.4 million generated in fiscal year 2013, according to the release. The firm’s fiscal year ends on Oct. 31.

To finance its operations under chapter 11 protection, Coyne has obtained a commitment for $3.5 million in debtor-in-possession (DIP) financing from Chicago, Illinois–based NXT Capital, LLC.

NXT is also the agent for Coyne’s senior secured debt.

“We view NXT’s willingness to make a DIP loan as an important vote of confidence from our senior lender and we look forward to working with NXT to complete this restructuring,” Samson said.

Coyne owed NXT, its senior secured lender, about $34 million as its chapter 11 case begins, the release stated.

The company also owed New York City–based Medley Opportunity Fund II, L.P., its junior secured lender, about $20 million as the case commences.

Contact Reinhardt at ereinhardt@cnybj.com