Email Rose Krebs
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our daily newsletters. Signing up for any of our section newsletters will opt you in to the daily Coronavirus briefing.
Law360 (September 23, 2020, 11:38 AM EDT) —
American affiliates of Canada-based auto parts supplier Hematite Holdings Inc. opened a Chapter 15 in Delaware bankruptcy court late Tuesday for recognition of a foreign main proceeding, saying its operations have been hard-hit by the COVID-19 pandemic and resulting production shutdowns.
Three Hematite affiliates in the U.S. and multiple Canadian affiliates are included as debtors in the bankruptcy proceedings, with the company’s chief treasury officer saying in an initial declaration that the auto parts maker has reached an agreement with its key lenders and customers for Ontario-based Woodbridge Foam Corp. to serve as its restructuring sponsor.
Woodbridge is set to provide $6 million in debtor-in-possession financing to fund operations as the bankruptcy proceeds and acquire the equity in the restructured company, according to the first day declaration of Jacques Nadeau. The company, which filed for its Canadian bankruptcy on Sept. 18, plans to emerge from bankruptcy by the end of the year, according to court filings.
Hematite, which manufacturers auto parts such as insulators, plugs, airflow management equipment and under-engine covers, counts Toyota, Fiat Chrysler Automobiles and Ford among its customers. The company has operated since 1978 in Canada and currently has manufacturing and industrial facilities there, according to court filings.
Also, Hematite has expanded its operations into the U.S. with a production facility in Ohio and another in Tennessee that has not yet started production, fillings said.
Hematite’s debt includes roughly $14.5 million in secured debt owed to TD Bank, roughly $3 million in secured debt owed to BDC Capital Inc., roughly $10 million owed for leases at its Ohio location and roughly $16 million in trade debt.
The Chapter 15 in Delaware has been assigned to U.S. Bankruptcy Judge Mary F. Walrath.
The case is In re: Hematite Holdings Inc., case 1:20-bk-12387, in the U.S. Bankruptcy Court for the District of Delaware.
–Editing by Katherine Rautenberg.
For a reprint of this article, please contact [email protected]