Tanknology Files Chapter 11

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Tanknology Files Chapter 11

AUSTIN, Texas -- Tanknology/NDE Corp., Tanknology-NDE Construction Services Inc., and their parent company, Tanknology-NDE International Inc., yesterday announced it filed for Chapter 11 bankruptcy protection in Texas.

The filings were a direct result of the Federal Government failing to honor agreements made during negotiations in October 2002 for the finalization of Tanknology's guilty pleas in July for falsifying field results at federal facilities, the company said.

Though operating in bankruptcy, the company plans to continuing servicing its customers.

"CIT has agreed to provide a $5 million credit line to the company during the bankruptcy proceedings. We have filed a motion seeking court approval on debtor-in-possession (DIP)
financing that will allow us to continue our operations and service our customer requirements," said Allen Porter, Tanknology's president and CEO. "Tanknology will continue to conduct normal business operations and make customer service a primary concern during the reorganization process. It is important to note that these filings were unrelated to the operational performance of the companies. Moreover, both operating companies are at profitable levels.

"While we are extremely disappointed in being forced to take this action, we are committed to becoming stronger companies as a result of it. We appreciate the continued support from our customers, suppliers, vendors, and employees as we navigate through this difficult time for our company."

In July, Tanknology, the nation's largest underground storage tank inspection company, agreed to pay $2.29 million in fines and restitution after pleading guilty to producing false reports at federal facilities in nine states. Under the plea agreement, Tanknology pleaded guilty to 10 felony counts of presenting false claims and making false statements to federal agencies from 1997 to 1999, according to a joint statement from the Environmental Protection Agency (EPA) and U.S. Justice Department.

The tests involved postal, military and other facilities, including Brooks Air Force Base in San Antonio, the Fort Worth Joint Reserve Naval Air Station and the Kennedy Space Center in Florida. The storage tanks that were supposed to be tested contained petroleum products, including gasoline and jet fuel.