O'Sullivan Industries may file for bankruptcy

O'Sullivan Industries officials may be just delaying the inevitable with their short-term extensions as they try to negotiate with their creditors.
In documents filed Thursday with the Securities and Exchange Commission, Kelly Terry, senior vice president for operations, said, "Although we would prefer to reach a consensual restructuring of our debt, our creditors may not consent, and a consensual restructuring may not be possible. In either case, we may be required to file for protection under Chapter 11 of the Bankruptcy Code to restructure our debt."
The statement was made as part of a filing in which Terry told the SEC that O'Sullivan will not be able to release its annual (10K) or quarterly (10Q) reports on time.
"On July 15, 2005, we entered into an available grace period on the semi-annual $5.3 million interest payment due on our senior secured notes due 2008 and announced that we were entering into discussions regarding a financial restructuring of OÂ’Sullivan," Terry wrote. "On August 15, 2005, we announced the execution of a forbearance agreement with holders of approximately 83 percent of our senior secured notes. The forbearance period has been extended to October 15, 2005."
These efforts to reorganize have kept company officials so busy they have not had time to prepare their reports, Terry indicated.
"We are still reviewing certain accounting issues relating to the fiscal 2005 financial statements which would affect our balance sheet at June 30, 2005, and our results of operations for fiscal 2005," Terry said.
"Because we are still reviewing our financial statements, the audit of our financial statements is not complete. Our Independent Registered Public Accountants have, however, informed us that they anticipate modifying their opinion to include an explanatory paragraph about O'Sullivan's ability to continue as a going concern."
Because things have been changing so rapidly, Terry said, "management has not been able to prepare a report that would be accurate as of the required filing deadline."