The Wichita Eagle reports that TECT Aerospace filed for the protection on Tuesday, which also covers the company's facilities in Park City, Wellington, and Everett. It does not cover a facility in Nashville, Tennessee.
"The company experienced catastrophic financial losses stemming from the suspension of 737 Max production (in December 2019) followed by the impact of Covid‐19 on industry production rates," TECT said in a statement.
"Following fifteen months of diligent work with its lenders, customers and suppliers and after exhausting all efforts to restructure out of court, TECT has concluded that an orderly and organized Chapter 11 proceeding is in the best interest of its creditors," the company added in its statement.
Boeing has become the Kansas company's largest and most important secured creditor, after taking over loans totaling $41.9 million, including PNC Bank debt after TECT defaulted, and unsecured trade bills worth another $18 million, the records show.
TECT Aerospace said Boeing's additional financing will allow TECT to continue operations while it uses the bankruptcy court proceeding to make "separate sales of its Washington and Kansas operations to maximize value for its creditors."
The company said in its filings that it will continue its work during the bankruptcy reorganization and plans to separately sell its Kansas and Washington state operations.
Court documents say among its creditors, TECT owes about $18.3 million to Boeing and $4.2 million to Spirit AeroSystems.
TECT Aerospace manufactures assemblies and parts that are used in airplane flight controls, fuselage/interior structures, doors, wings, landing gear, struts and nacelles, and cockpits.
