RMI Files for Bankruptcy
LAFAYETTE, Colo., July 14, 2009 -- Optical components maker Rocky Mountain Instrument Co. (RMI) has filed for Chapter 11 bankruptcy, citing the recession and a 2007 federal raid on the business as contributing factors, according to the Denver Business Journal.
Founded in 1957, RMI manufactures full-spectrum (ultraviolet through far infrared) optical components and assemblies for laser and imaging applications. According to its Web site, the company was bought in 1983 by Dr. Yubong Hahn, a recognized expert in high-power thin-film coatings, who transformed RMI's Optical div. from a seven-person optical shop into an industry player. The company reportedly now has 150 employees at its 90,000-sq-ft headquarters and primary manufacturing facility in Lafayette, outside Boulder, with additional offshore subsidiaries in Korea and Russia. Its laser affiliate, RMI Laser, makes YVO4 (yttrium vanadate)-based diode-pumped, solid-state lasers for the industrial, military, commercial and government markets.
According to the Boulder County Business Report, RMI's Chapter 11 filing in US Bankruptcy Court in Colorado shows that it has debts of between $1 million and $10 million to as many as 49 creditors.
Citing an affidavit that is part of the court filing by RMI Executive Vice President Steve Hahn, whose family owns the company, the Denver Business Journal reported that RMI’s revenue this year is on track to fall 16 to 30 percent below the $15.5 million it posted in 2008.
Hahn also discussed the October 2007 raid on the business by officials from the Defense Criminal Investigative Service, or DCIS, that has not resulted in any charges against the business. At the time, local media reported that a convoy of about 50 cars containing members of Immigration and Customs Enforcement (ICE), DCIS and Lafayette police surrounded the business on the morning of Oct. 11. Agents were seen removing boxes from the business and loading them into a truck.
A week later, RMI posted on its Web site a portion of a letter it sent to customers about the raid, saying federal authorities had initiated a review of its export control procedures. The company also said the investigation did not include RMI Laser.
Hahn said in the court filing that the raid was triggered by a complaint to the DCIS filed by an employee, who claimed the company committed a “procedural violation” of export controls by allowing specifications for an undisclosed product to go overseas. The raid triggered a 15 percent decline in business and the company lost money throughout 2008.
According to the journal, the company cited defaults on its bond payments as "the single factor" for its filing for bankruptcy protection. RMI was unable to refinance its debt or sell its laser technology business last year, the affidavit said. The company has asked the court for permission to use about $1 million of its lines of credit before the end of the month to keep the business going and fulfill orders while it reorganizes. It also asked the court for permission to use cash to hold onto its highly specialized work force.
For more information about RMI, visit: http://rmico.com