Environmental issues broke mining firm Gulf Chemical and Metallurgical Corp.’s back and it is now seeking relief through the bankruptcy court.
Court papers revealed that the company and its unit Bear Metallurgical Co. filed for chapter 11 bankruptcy protections hoping to cover its losses and operate as a going business concern.
The company filed its chapter 11 petition with the US Bankruptcy Court in Pittsburgh reporting $100 million in assets and $500 million in debts.
The Texas based company provides recycling services to petroleum refiners. Its parent company, Eramet Group, a French mining and metallurgical firm, has committed to shelling out $12 million to cover the costs of the case.
According to its filing, Gulf said it is sensitive to metals markets and the drop in prices had cut into their profits.
The firm also attributed its financial burdens on environmental obligations. In 2010, the company did not contest allegations of felony violations of environmental laws. Since then, Gulf has spent more than $10 million on environmental penalties and invested an additional $50 million on new initiatives to avoid future violations.
