Motion Systems of Tempe, Ariz., has shut down operations in Denver and is being liquidated by its bank, company officials told Newspapers & Technology.

Motion Systems manufactured roll handling, waste handling, mailroom and bundle distribution systems for newspapers and conveyor systems for the U.S. Postal Service. Customers include the New York Times, the Los Angeles Times, the Washington Post, the Chicago Sun Times, the (Denver) Rocky Mountain News, the New York Daily News and 12 Wall Street Journal plants.

Tim Carroll, president and chief executive officer of Motion Systems, Tempe, Ariz., said on July 30, “Motion Systems is being liquidated by our bank, (which) is collecting the receivables and the assets of the company.”

Although Motion Systems was current on its debt payments, the company violated acceptable debt-to-equity ratios in the loan covenants.

“They didn’t have risk tolerance for the debt ratio and with the lack of work, they wanted to reign in the line of credit. So without the line of credit you don’t go forward. There is no bankruptcy. This is strictly a liquidation,” Carroll said.

He also added that the lack of revenue hurt the company’s chances to refinance its working capital. Carroll attributed the company’s failure to lack of sales in both the newspaper and postal businesses.

“The bank is setting up a warranty reserve account and we are working with them to make arrangements for services”, Carroll said.

More details about the warranty reserve will be available during the next 30 days, Carroll said.