KLN Steel Returns to Chapter 11 Bankruptcy

by San Antonio Attorney

It was five years ago when KLN Steel Products Co. LLC, a furniture maker in San Antonio, Texas, filed for bankruptcy.  The company and its parent company recently filed for Chapter 11 bankruptcy.

AGS Enterprises Inc.  and KLN filed separate bankruptcy petitions on Nov. 2.  The parent company is also operating under Avteq Inc.

KLN, which supplies furniture for universities and military barracks, announced both debts and assets between $1 million and $10 million.

The main cause of the bankruptcy filings have not been revealed by the two companies.  Both of them are represented by bankruptcy attorney Frank Wright.

Before the bankruptcy, Avteq, KLN, affiliated companies, KLN President Kelly O’Donnell, and her father, John O’Donnell, have been defending themselves from a whistleblower lawsuit.  They have been accused of defrauding the federal government with a lot of money.  The allegation was brought by a competitor in the business.  Kelly O’Donnell earlier has denied the accusations against them.

The bankruptcy proceedings will basically suspend that litigation temporarily.

KLN has been running a manufacturing place at 2 Winnco Drive.  The company has 130 employees.

The biggest unsecured creditor of both companies is LGC Building, which they owe about $583,000.

Five years ago, KLN and a couple of sister companies filed for bankruptcy when a lender declined to fund their payroll.

In 2012, Avteq acquired KLN for $11 million.

There are no limits on how often a company or individual can file for bankruptcy, as long as there is no bankruptcy court order against it.  However, if debts were discharged in a preceding bankruptcy, the debtor has to wait for a certain time period before debts can be discharged again.

To know more about repeat bankruptcy filings, you should talk to San Antonio Chapter 13 Attorney.

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