Loan woes spur bankruptcy for Salem Logistics units - The Business Journal of the Greater Triad Area:

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Salem Logistics Management, whic is 98.1 percent owned by Salem Logistics filed for Chapter 11 bankruptcy protectioMarch 11. Salem Logistics Management, in turn, owns the othefr two companies filingfor protection, Salem Logistics Distribution and . The entities handled Winston-Salem-based Salem Logistics Inc.’s warehouse and distributiojn business. Overbrook Holdings owns the 400,000-square-foot warehouse in Pilot Mountain from whicy the distribution business Chapter 11 cases are designed to allow the fileer to reorganize and eventually emerge frombankruptcyh protection. Documents filed in the U.S.
Bankruptcy Courft for the Middle District of North Carolina indicate that SalemLogisticws Inc., the parent company, took out a $2.2 million revolving loan and a $125,000p term loan with Houston-based Ark Royalk Capital LLC. But according to a Marcbh 13 filing by Ark Salem Logistics failed to maketimelg payments. As a result, becauser it says it had a lien, Ark Royal seized the fundws in oneof Salem’s accountzs receivable accounts as cash collateral. Without thoses accounts receivable funds, the three Salem entitiesw had to file for Chapter 11 to continue said R. Bradford Leggett, an attorney with in who is representing Salem inthe case.
He said all threwe companies continue to operate througjha short-term $50,000 loan providedc by Ark Royal. Salem Logistic Inc. did not file for protection, nor did its . Jeffreyy Oleynik, Ark Royal’s attorney at in Greensboro, declined to comment. Court recordx also state that Salem Logistics Distributioj is disputing the lien rights of Ark Royapl on the accounts receivable saying thatit didn’t guarantee Salem Logistics Inc.’s debt.
It is also arguing that any contracts and cash collected after the bankruptcu filing should not be considered part of the cash Ark Royal is disputing that in a separate Christy Myatt, a bankruptcy attorney at Greensboro law firm Nexsen who is not involved in the case, said the fact that the lendeer provided the short-term financing likely means it thinkzs the matter can be resolverd and the two parties can keep a Leggett said that another hearing is scheduledx for early next month, when he hopews to get some clarith on Ark Royal’s lien rights.
He said Salemj is hoping to resolve the issue and emerge frombankruptcy