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NILES, IL-HALO Industries, Inc. is leaving its 267,344-sf state-of-the-art office building at 5800 W. Touhy Ave. as part of an effort aimed at slashing $20 million in annual expenses. The promotional products distributor, which has filed for Chapter 11 bankruptcy reorganization in the wake of a $300-million writeoff of a failed Internet venture, has been involved in talks with building owner and developer CenterPoint Properties Trust involving restructuring its $6-million-a-year lease.

CenterPoint officials earlier this summer said they believed Halo would remain in its facility, which was first occupied by HALO in April, through November. However, company officials instead Monday announced management and support functions would be relocated to Sterling, IL, where HALO has a subsidiary. Not all managers and their support staff will relocate to Sterling, however. Most of their jobs are being eliminated. Meanwhile, the sales department and Events by HALO division will move to nearby Skokie while data processing will be done out of west suburban Oak Brook.

The moves will begin next week and are expected to be completed by March.

“Since filing for Chapter 11 protection, we have made solid progress, but we realize that more is needed to return our Company to profitability,” says HALO President and CEO Marc Simon. “In light of the difficult economic conditions we’re all facing, this operational restructuring is necessary for us to emerge from Chapter 11.”

Negotiations on restructuring the lease have been ongoing since April, when HALO moved into the new facility. If HALO decides to reject the lease, it could affect CenterPoint’s net operating income by $2.2 million.

“Our actions to date are projected to have reduced a massive annual cash loss to a comparatively small annual cash deficit,” Simon says. “But unless HALO is earning a profit, it is not positioned to emerge from Chapter 11. We project our new action plan will result in a modest annual cash flow profit.”

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