Avalon Fortress Security files for Chapter 11
Minneapolis / St. Paul Business Journal - by Carissa Wyant Staff Writer
Avalon Fortress Security Corp. has filed for Chapter 11 bankruptcy protection.
The Minneapolis-based security company has $658,000 in estimated cash assets and $5.5 million in estimated liabilities, according to its attorney.
Avalon employs 300 and claimed annual revenue of $10 million in its most current fiscal year.
The company’s attorney, Kenneth Corey-Edstrom, of Minneapolis law firm Larkin Hoffman Daly & Lindgren, explained in an interview that after 9/11 the company expanded “too fast” in the residential security market, and ran into problems with the IRS, which Corey-Edstrom said claims that Avalon owes at least $3 million in taxes.
The company had been trying to work out a deal with the agency, but was unable to do so, and cash flow became an issue. The company hopes to remain in business through its chapter 11 reorganization, he added.
A hearing in Federal Bankruptcy Court in Minneapolis has been set for Friday.
Several local creditors are listed in the bankruptcy, including the Minnesota Department of Revenue, with claims of $494,413 and $186,929. West Bend Mutual of West Bend, Wis., is owed $90,840 and Chase Auto Finance of Phoenix, Ariz. is owed $70,388. Moss & Barnett of Minneapolis is owed $55,354.
cwyant@bizjournals.com | (612) 288-2108
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