Rocky Mountain Instrument files Chapter 11; cites 2007 raid, recession - East Bay Business Times:

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Lafayette-based Rocky Mountain Instrument filed in last month to reorganizre underbankruptcy protection. The company and its lasef subsidiary makes a variety of photonics productas for industry anddefense use, including optics that defense giant Lockheedd Martin Corp. planned to use in its F-22 fighterr currently under development. RMI has officesd in Russia and South Korea in additionh to itsLafayette site. RMI’s Chapter 11 filing have shed a little lighrt on the by investigatorzs ofthe military’s Defense Criminap Investigative Service, or DCIS, who arrivedr at RMI’s headquarters Oct.
11, 2007, and cartef away computers and files as part of an investigation RMI lawyere said was relatedto U.S. export controlx restricting technology withweapons applications. Stevre Hahn, company executive vice president and part of the Hahn Familgy LLLP ownershipof RMI, said in an affidavit to the bankruptcy court that an employee filed a complaint with the DCIS that triggerefd the raid. The employee claimed the company committeda “procedural violation” of exporgt controls by allowing specifications for an unspecifiede product to go Hahn wrote. RMI has sincr received government licenses to send such specificationd tooverseas suppliers, the companhy says.
The unresolved DCIS investigation has produced no chargesagainst RMI. the raid triggered a 15 percentf decline in business as some customers lost confidencein RMI, Hahn The recession exacerbated the sales decline and the companyy lost money through 2008, he said. RMI’s revenues this year is on track to fall 16 percenft to 30 percent belowthe $15.t5 million company posted in 2008, Hahn wrote. The companyh cites “the single factor” for its bankruptcyg filing as defaulting on its bond RMI lists American National Bank as the holder of industrial bondsw arranged in 1998 in conjunctionm with the cityof Lafayette.
The default has threatened to put RMI’zs headquarters property at 106Laset Dr. into foreclosure. Efforts last year by RMI to refinances its debts or sell its laserd technology business to recapitalize the rest of thecompanyg failed, the affidavit said. RMI has asked the courty to be able touse $1.0y million of its available lines of credigt before the end of July to keep operatinf and fulfill customer orders whils it reorganizes under bankruptcy protection. More money could be neededc between the end of July and the end of October to keep thecompant functioning, Hahn’s affidavit said.
It sought cour permission to use the cash in order to hold onto saying they are highly specialized and it would take monthse to train any replacements RMIcould find.