Lancaster County-based Powell Steel Corp. could end the year with positive cash flow and have more time to work through its Chapter 11 bankruptcy reorganization depending on how a judge rules on recent proceedings, according to court documents.
Powell Steel’s attorneys have filed a proposal with the court to allow the company to use cash collateral to pay workers and maintain operations, attaching a company budget for Nov. 16 through Dec. 31 that includes nearly $600,000 in contract income.
The income would leave Powell Steel with net operating income of $154,630 for the month, and after making bank and other payments, the company would end the month with $129,755 in net cash flow, according to the court documents. Add its existing balance of nearly $75,000 and the company would have $204,696, according to the filing.
Powell Steel and its creditors are awaiting rulings from Judge Magdeline D. Coleman of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania in Philadelphia on the company’s proposal, as well as its creditors’ motions to liquidate assets and pursue recourse in state courts, according to the office of the clerk of court.
No further court dates are set for December, January or February at this time, according to the clerk’s office.
Powell Steel’s President Stephen Powell did not immediately return calls seeking comment on the contracts and the reorganization.
The company based in Pequea Township is a fabricator and erector of structural steel, a market that’s faced tough times in recent years but is seeing improvement lately.