New York heating and cooling contractor Air Kool Mechanical Contracting filed for Chapter 7 bankruptcy on December 15, 2020, noting over 20 contractors and material suppliers as creditors. The bankruptcy documents, filed with the US Bankruptcy Court for the Southern District of New York, report an 84.7% decrease in gross revenue since 2019.
Air Kool Mechanical Contracting, headquartered 40 miles north of New York City in Congers, claims in their petition for Chapter 7 bankruptcy that they owe $449,407 to 51 creditors — 24 of which are contractors and material suppliers.
The heating and cooling contractor also notes a loss of $20,000 after a customer canceled their order for a custom-built AC unit.
At the time of their bankruptcy filing in December of 2020, Air Kool Mechanical Contracting reported:
- $449,407 in total liabilities
- $89,927 in total assets
- $710 in total checking
- $69,217 in accounts receivable
From the beginning of the fiscal year to Air Kool Mechanical Contracting’s filing date, the company reports $315,671 in gross revenue.
In 2019, the heating and cooling contracting reported earnings of $2,057,740 in gross revenue.
Between 2018 and 2019, Air Kool Mechanical Contracting’s gross revenue fell 4%, with a reported $2,143,920 in gross revenue in 2018.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy requires a debtor’s assets to be liquidated in order to pay back creditors. Only the debtor’s nonexempt property, which is not required to maintain a basic standard of living, will be sold with its proceeds distributed to creditors.
During the Chapter 7 bankruptcy process, a trustee is appointed to review the case and to meet with creditors. The trustee and the creditors will then review the debtor’s finances and the recoverable assets. Unsecured priority claims are addressed first during a Chapter 7 filing, followed up by secured debt. The last type of debt to be addressed is non-priority unsecured debt.
Secured claims total $114K
Air Kool Mechanical’s official bankruptcy filing lists five secured claims worth a combined $114,081.
The largest secured claim is security interest worth $100,000 from JP Morgan Chase’s legal department.
Rhinebeck Bank has the second-largest secured claim worth $14,081 for a security interest that specifically involves a 2016 GMC Sierra Pickup.
TD Auto Finance also holds a secured claim for a security interest concerning a 2019 Chevrolet Express Van, but the amount of the claim is listed as “unknown.”
Similarly, both Bank of America and GM Financial have the remaining two secured claims with Air Kool Mechanical Contracting for purchase money security. The bankruptcy filing lists each claim amount at $0.
46 Unsecured Creditors
At the time of their bankruptcy filing, Air Kool Mechanical Contracting reported having 46 unsecured claims worth a combined $335,326.
Of Air Kool Mechancical’s 46 creditors with unsecured claims, 24 are contractors or material suppliers — all of which having nonpriority unsecured claims.
Among contractors and suppliers, Vinny’s Automotive holds the largest unsecured claim worth $8,193 for automotive parts and services. The remaining contractor and supplier creditors include:
- Aaron & Company – $234.00
- Abco Refrigeration – $915.00
- American Compressed Gasses Inc. – $474.00
- Auto Plus – $22.00
- Beckerle Lumber – $157.00
- D&B Building Solutions LLC – $6,000.00
- Dannys Service Center – $422.00
- Gil-Bar Industries – $0
- Grainger – $140.00
- Home Depot Commercial Account – Unknown
- Jan-Pro Cleaning Systems – $75.00
- Johnstone Supply – $1,498.00
- M-C-N Distributors, Inc. – $115.00
- Mestex Inc. – $246.00
- Nazzaro Disposal Inc. – $329.00
- Pest Shield Corp. – $281.00
- Pitney Bowes, Inc. – $32.00
- R.E.D Michel Company, LLC – $120.00
- Ramapo Wholesaler – $516.00
- Sunbelt Rentals Inc. – $0
- ULine – $152.00
- Unifirst Uniforms – $264.00
- WinSupply Inc. – $624.00
Other unsecured creditors of note include the IRS, which holds a disputed priority claim worth $98,395. The IRS’s claim concerns payroll taxes from the first and second quarters of 2020.
Air Kool Mechanical Contracting’s remaining three unsecured priority claims also involve taxes, with each claim amount listed as “unknown.” Such creditors include the NJ Division of Taxation
Special Procedures Branch and the NY State Dept. of Tax & Finance, which has two separate claims concerning sales and corporate taxes.