LMI Solutions Goes into Receivership
Cartridge-remanufacturer LMI Solutions of Phoenix, Arizona, has gone into receivership. Court proceedings are said to have been initiated on August 12th by a lender to LMI, Midcap Financial, in the Superior Court of the State of Arizona.
According to court documents, LMI was granted loans totaling approximately $14 million. It owes some $5.6 million on the credit agreement, with the bank appearing to demand the loans be paid immediately, which caused the need for LMI to file for receivership.
According to court documents, LMI has been negatively affected by increasing competition, as well as an expanded Xerox-HP Inc. partnership, under which “dealers in the Xerox Business Solutions network would be mandated to use only HP Products. Members of the Xerox business network included Chicago Office Technologies Group, [LMI’s] single largest customer.”
Annie Willert, vice president of sales and marketing for LMI Solutions, explained that receivership is a step in which a trustee is legally appointed to act as the custodian of a company’s assets or business operations. It’s typically invoked during legal proceedings, with the goal of returning the company to a profitable state and thereby avoiding bankruptcy.
MCA Financial Group has been appointed the receiver in this action, effective immediately. LMI, “its agents, employees, managers, members, directors, partners, representatives, and affiliates must immediately turn over to the Receiver sole possession, custody, and control of the Collateral.” This includes “the Borrowers’ records, books of account, ledgers and all business records,” contracts, leases, tax identification numbers and “immediate and unlimited access to and full use of any real property interests.”