American LaFrance LLC, one of the oldest fire truck builders in the country, filed for bankruptcy protection Monday as it tries to restart production at its new Summerville plant.

The company said it filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware. It will ask the court to approve $50 million in debtor-in-possession financing from the lenders it had before the filing.

American LaFrance said it will keep operating its manufacturing plants and repair services while it reorganizes. It has hired William K. Snyder, a managing partner with CRG Partners Group LLC, as chief restructuring officer.

The company said it expects to complete the reorganization in less than 90 days and to emerge “with ample liquidity for ongoing operations and a more viable debt structure.”

What went wrong

American LaFrance bought its business from Freightliner LLC in December 2005, according to the company. It said the bankruptcy stems from operational problems that followed its separation from Freightliner.

In a question-and-answer sheet for customers, the company pointed to two causes. One was inventory that was not properly disclosed as obsolete when it acquired the business. The other was disruption from installing a new enterprise resource planning computer system as it moved away from its previous owner’s system.

Those problems slowed production, left a large backlog of unfilled orders and left the company without sufficient funds to keep operating, it said.

To cover the problems and its general operating costs, American LaFrance has taken on about $150 million in secured debt since buying the business from Freightliner, according to its announcement. The customer question-and-answer sheet put that figure at about $100 million.

The company said it filed voluntarily so that it would not be forced into an involuntary bankruptcy in which it would have no say in its future.

“A bankruptcy is about a company reorganizing itself so it can correct its financial problems and be a stronger company in the future,” the company said in the customer document.

Workers and plants

Many production workers have been on furlough since mid-December, when work slowed because of parts shortages tied to the computer problems and delays from the company’s move to its new plant near Charleston, American LaFrance said. Most are returning in stages, and the company is planning a manufacturing restart on March 10, it said.

Furloughed workers have been able to collect unemployment benefits, and the company has kept their health coverage in place, according to the customer document. When the furlough ends, the company expects to have about 800 employees.

American LaFrance has also announced it will close its plant in Sanford, Fla., and stop making ambulances. Other fire and rescue products built in Sanford will move to its plants in the Charleston area, Hamburg, N.Y., and Ephrata, Pa., the company said. It is also folding an aerial refurbishment operation in Lebanon, Pa., into the Ephrata aerial plant.

The company’s Condor product line is built at the Summerville plant and will not be affected by those changes, it said. American LaFrance is also moving its parts distribution center into the main Summerville plant.

Customers and orders

The company said it would file motions Monday asking the court to let it honor customer warranties and pay employee wages, among other things. It also intends to honor obligations to supply vehicles that are backed by performance bonds.

“While many orders are already quite late we will be able to give our customers an accurate updated delivery time that can be met,” the company told customers.

American LaFrance said it will soon file a reorganization plan, along with a motion to sell the business under Section 363 of the bankruptcy code in case the plan is not approved.

American LaFrance, through companies that came before it, traces its roots to 1832. It runs eight manufacturing and service facilities and two company-owned dealerships, according to its announcement. Its headquarters is at 1090 Newton Way in Summerville.