Expensive prices and limited buyers delay Camston Wrather bankruptcy

High expenses and a lack of potential buyers have halted the bankruptcy proceedings of circuit board processor Camston Wrather, where creditors are owed over $100 million. The trustee overseeing the bankruptcy has expressed concerns over the dwindling cash reserves, the inability to find interested buyers for a full-facility sale, and the limited recovery that would come from selling specific equipment.

Initially filing for Chapter 7 bankruptcy on February 13 to close operations and liquidate assets for creditor repayment, Camston Wrather’s plans have encountered obstacles over the past seven weeks. The trustee revealed that the company initially aimed for a reorganization under Chapter 11 to keep operations running but had to switch gears due to a failed financing agreement.

David Carickhoff, the trustee, noted in a court filing that the abrupt pivot to liquidation left little time to prepare standard bankruptcy documents, muddling the proceedings. The company’s e-scrap recycling activities were housed in a leased Carlsbad facility, and the trustee expressed uncertainty about the status of other business entities like ITAD firm Stream Recycling Solutions.

Most of Camston Wrather’s assets are ensnared in liens, with secured creditors demanding repayment exceeding $100 million. Efforts to sell the facility as a turn-key operation, including successful Department of Defense testing in early March, have yielded no viable offers. The trustee also highlighted the burdensome monthly expenses to maintain the facility while idle, further complicating the bankruptcy process.

Legal woes also add to Camston Wrather’s distress, with pending civil suits and liens against the company. Engineering and construction firm Total-Western has claims exceeding $9 million, while IHI Power Services is pursuing $476,000 plus interest for contract termination fees. These legal battles further complicate the bankruptcy proceedings.

Camston Wrather’s financial history reveals a failed investment deal with Evolution Metals, an investment firm that poured $12.5 million into the company in mid-2024. Despite Evolution’s initial plans to fully acquire Camston Wrather for $1.25 billion, the investment firm ultimately decided not to pursue the business venture, leading to Camston Wrather’s current financial debacle.