Encompass to File for Chapter 11 Bankruptcy Protection

Encompass Services Corp., the second largest electrical contractor with 2001 sales of $1.635 billion, plans to file for bankruptcy protection. The Houston-based specialty contractor and janitorial services firm acquired hundreds of companies in the late '90s and merged with another rollup, Group Maintenance America Corp., in 1999. As part of Encompass' financial restructuring plan, senior secured lenders will receive a $200 million term loan and 80% of the new common stock, the subordinated debt holders will get 20% of the new common stock, and preferred stock holders will receive no value according to an Oct. 14 Yahoo! Finance story. The New York Stock Exchange (NYSE) recently suspended trading in the shares of Encompass Services Corp. and filed an application with the Securities and Exchange Commission to delist the stock for not complying with the exchange's listing requirements. The company's stock failed to meet the NYSE's average closing price rule of at least $1 and minimum average global market capitalization requirement of $15 million.