Edison Price Lighting Inc., a manufacturer with offices in White Plains, cited the coronavirus pandemic in filing for bankruptcy, but its bank claims that the financial difficulties preceded the crisis.
Edison Price declared $5.1 million in assets and nearly $8.5 million in liabilities, in a May 1 Chapter 11 petition filed in U.S. Bankruptcy Court, White Plains.
It needs bankruptcy protection, according to a declaration by Emma Price, the president, to obtain breathing room from creditors while it marshals assets to “either sell the company as a whole or sell off its inventory, raw materials and other assets.”
Edison Price’s architectural lighting has been installed in hundreds of museums and galleries – including the Louvre in Paris and the Metropolitan Museum in New York City – and in schools, hospitals, offices and homes.
The products are manufactured in Long Island City and the sales office is in White Plains.
The company was founded in 1952 by Emma Price’s father, Edison Price, who was named after inventor Thomas Edison and whose family worked in theatrical lighting.
Gross revenue totaled $17.3 million in 2018, according to a bankruptcy statement, but dropped more than 31% last year, to $12 million. Revenues this year reached nearly $1.9 million in the first four months.
Edison Price Lighting had been struggling against competitors from China and elsewhere, Price stated, but it was the pandemic that forced the company to close and lay off most of its 80 employees.
The company owes nearly $3.7 million to Citibank, and $4.8 million to 166 unsecured creditors, including $1.4 million to the Internal Revenue Service and more than $1 million to its Long Island City landlord.
Price stated that the company needs cash to pay a skeletal staff on an hourly basis to preserve assets and for current obligations, such as insurance and utilities.
It had a $300,000 balance with Citibank, but the account was frozen on April 30.
Edison Price asked the court to free up the money. Citibank objected.
The company has been shuttered since March 20, when New York put strict limits on nonessential businesses, the bank states in a court filing. Edison Price cannot manufacture lighting or generate revenue and it has no ongoing operations to support.
“The fundamental issues arising between the debtor and Citibank are essentially unrelated to the pandemic,” according to the bank.
It claims that the company has been in default on two loans since the end of 2019, and that the business has refused to provide financial data and records or respond to communications.
“Citibank has had, and continues to have, serious concerns about management’s ability to operate or even sell the debtor’s business.”
“Moreover,” the bank stated, Edison Price’s “aspirational attempt to maintain ‘going concern’ value – while exploring the possibility of some uncertain future sale – simply does not comport with the reality of the debtor’s financial situation.”
The company replied that Citibank bounced a $24,063 check for insurance in April yet two days later debited $43,603 for the monthly loan payment.
“This country is in crisis,” Edison Price states in its reply. “More bankruptcies or company closures are to come. Citibank needs to work with its borrowers or there will need to be new bailouts that will further devastate the economy and risk our national security.”
U.S. Bankruptcy Judge Robert D. Drain granted the company interim authority on May 15 to use cash from its Citibank account through May 29, “to meet its current obligations and preserve the going concern value in connection with the sale of substantially all of its assets.”
Citibank was granted a priority interest in Edison Price’s property, and the business must report detailed financial information to the bank.
A hearing will be held on May 29 to consider extending the company’s use of cash.
Edison Price Lighting is represented by Harrison attorney H. Bruce Bronson. Citibank is represented by Manhattan attorneys Stuart J. Glick and Anthony F. Pirraglia.