Armor manufacturer Point Blank, a Delaware Corporation based in Florida, announced yesterday that it has filed a voluntary petition for Chapter 11 reorganization. The Company also announced that it has reached an agreement for up to $20 million of Debtor-in-Possession (“DIP”) financing, pending bankruptcy court approval. The DIP is a loan to help with the restructuring. At the end of Wednesday trading, the company’s stock had fallen to .05 per share.
The company blames the need to file for bankruptcy on “continued expenses associated with legacy issues from former management, and the lack of financing available to the Company given the state of the credit markets.” Those “legacy issues” are that the former CEO David Brooks is under indictment for fraud and the company itself has been under investigation by the Securities and Exchange Commission as well as the subject of a shareholder lawsuit. All told, this costs Point Blank about $600,000 a month on legal fees.
But let’s face it, they grew rapidly to accommodate OTV and IOTV contracts and then they didn’t sustain the same level of work. It happens. Other companies are dealing with issues in their own ways as well. Maybe they can find a small business shill to get them some work under the proposed IOTV Class Waiver.
[…] It’s been awhile since we have seen anything on this case. Brooks is no stranger to the courts and was previously charged for fraudulently diverting $10 Mil in company funds for his personal use. You may also remember that Steven Colbert picked him as the “Alpha Dog of the Week“. Additionally, Point Blank is currently in bankruptcy court. […]