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Condensed Consolidated Financial Statements
6 Months Ended
Jun. 30, 2017
Condensed Consolidated Financial Information Disclosure [Abstract]  
Condensed Consolidated Financial Statements
Basis of Presentation
The condensed consolidated financial statements included herein have been prepared by A. M. Castle & Co. and subsidiaries (the “Company”), without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet at December 31, 2016 is derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, the unaudited statements included herein contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of financial results for the interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The 2017 interim results reported herein may not necessarily be indicative of the results of the Company’s operations for the full year.
Consistent with its previously disclosed plans to restructure its financing obligations to reduce its long-term debt and cash interest obligations, on June 18, 2017, A. M. Castle & Co. and four of its subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the District of Delaware in Wilmington, Delaware (the "Bankruptcy Court"). The four subsidiaries in the chapter 11 cases are Keystone Tube Company, LLC, HY-Alloy Steels Company, Keystone Service, Inc. and Total Plastics, Inc. Also on June 18, 2017, the Debtors filed the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization with the Bankruptcy Court and on July 25, 2017, the Debtors filed the Debtors' Amended Prepackaged Joint Chapter 11 Plan of Reorganization (the "Plan") with the Bankruptcy Court.
The condensed consolidated financial statements included herein have been prepared on a going-concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The Plan was confirmed by the Bankruptcy Court on August 2, 2017, and it is expected to become effective and the Company plans to emerge from bankruptcy on or around August 31, 2017. Under Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", because the Company has not yet emerged from its chapter 11 bankruptcy proceedings and currently remains under the supervision of the Bankruptcy Court as of the date of the filing of the Quarterly Report on Form 10-Q, the Company is required to disclose that there is substantial doubt as to the Company's ability to continue as a going concern. However, the Company has continued operations in the normal course during the pendency of the chapter 11 proceedings, and expects to continue to do so. Upon the Plan becoming effective, which the Company believes is probable of occurring and will mitigate the liquidity risk raised by the chapter 11 proceedings, the Company will enter into a new asset-based revolving credit facility and issue new senior secured convertible notes, and the accelerated debt obligations of the Company will be satisfied pursuant to the terms of the Plan. As a result, management believes that the substantial doubt as to the Company’s ability to continue as a going concern will be alleviated upon emergence from bankruptcy. Refer to Note 2 - Bankruptcy Related Disclosures and Note 16 - Subsequent Events.