Civil Beat’s Nick Grube seems to be the only reporter to flag the bankruptcy filing by Synagro and worries that it could derail Honolulu’s efforts to upgrade sewage treatment facilities at Sand Island.

The company’s sewage treatment technology, central to the city’s Sand Island upgrades, has been controversial for years and, as Grube points out, continues to be a point of contention between the administration and the city council.

Synagro Holdings, Synagro Technologies, and a slew of affiliates filed for bankruptcy protection on April 24, 2013 in Wilmington, Delaware. The bankruptcy filing lists 30 corporate affiliates covered by the bankruptcy.

You can read the bankruptcy petition here.

The company says the bankruptcy simply provides time to arrange a sale of the company.

According to the DowJones Daily Bankruptcy Review:

Layoffs and facility closures aren’t in store for the company, which is operationally sound but in need of a lighter debt load, according to the CEO.

“There is no plan for a reduction in force, no reduction in operating footprint associated with this. It is truly a financial exercise to strengthen the company,” Mr. Zimmer said.

What caught my eye is that Synagro was taken over the the Carlyle Group in a highly leveraged buyout in 2007.

Reuters reported earlier this year:

Carlyle’s infrastructure fund borrowed heavily to take Synagro private in 2007 in a $772 million deal, leaving it financially vulnerable when municipalities cut spending on wastewater treatment and other environmental projects in the aftermath of the 2008 financial crisis.

It also lost two major contracts in New York City and Detroit. Its Detroit contract was mired in a bribery scandal that weighed on Houston, Texas-based Synagro’s public image.

Synagro was saddled with over $500 million of debt, with a $100 million credit facility due in April, Moody’s Investors Service Inc said in August. In December, Synagro said it had clinched a waiver from its lenders for a breach of covenants in its debt.

Yet another example of one of these corporate raiders using other people’s money to take over a company, betting that it will be able to eventually pay off the loans used to fund the acquisition and feed Carlyle’s profits.

Sometimes the bets pay off. Sometimes they don’t. But in most cases, it looks like the takeover target is left struggling with the bloated debt, and eventually sold off again.

We saw Carlyle do much the same thing with Hawaiian Telephone.

I hope Nick and Civil Beat can dig into this aspect a bit more.