Over the past 25 years, our team has developed a reputation for achieving exemplary results dealing with distressed businesses in the automotive sector. Our team has performed mandates across North America on behalf of lenders, debtors and other stakeholders. Recognizing the pressures faced by distressed automotive suppliers operating in a just-in-time environment, we have learned the need to have stakeholders work together to achieve their respective goals – the risk of a shutdown is catastrophic not only for the supplier, but also for its stakeholders. Our team takes pride in the credibility it has established in these situations with OEMs, their suppliers and other stakeholders, including organized labour.
Biltrite Rubber Inc. (“Biltrite”) was a rubber mixer and compounder, providing custom mixing, tolling, calendaring and extruding services to companies in the mining and automotive industries. Biltrite operated from facilities in Toronto, Ontario and Findlay, Ohio. Biltrite employed approximately 200 employees; its Toronto facility was unionized.
We were retained by Biltrite’s senior lender to work with management to formulate a restructuring plan. Biltrite’s difficulties were principally caused by a significant downturn in the automotive industry. The restructuring strategy contemplated a sale process in a formal, cross-border insolvency proceeding. Proceedings were commenced under the Companies’ Creditors Arrangement Act in Canada with a concurrent recognition proceeding under Chapter 15 of Title 11 of the United States Code. The Biltrite matter was the first Chapter 15 case heard by the Toledo, Ohio courts.
We acted as Monitor and Foreign Representative and carried out the sale process. Biltrite successfully bifurcated its business allowing us to complete two going-concern sale transactions that preserved the business and saved hundreds of jobs.
NRI Industries Inc. (“NRI”) was a vertically integrated manufacturer of parts made from recycled rubber (discarded tires and scrap polymers) used primarily in the automotive and industrial markets. NRI operated from four locations in Southern Ontario and employed approximately 500 individuals at the time its insolvency process commenced. Our team was retained by NRI to review its business plan and assist it to prepare financial projections under various scenarios.
At the time we were retained, NRI’s secured lender had engaged an advisor from a global accounting firm to consider the value of NRI’s business and assets. The advisor projected that the lender would incur a significant shortfall on its advances to NRI.
Following our review of NRI’s business and identification of the reliance on it by many of its customers, including several major North American OEMs, we designed a process to restructure the business under the Companies’ Creditors Arrangement Act.
Our team led the strategic process and oversaw NRI’s day-to-day operations over a six-month restructuring period. We brought NRI’s stakeholders together and developed a framework for financing and operating the business during the Companies’ Creditors Arrangement Act proceedings. We conducted a sale process for the business targeted at strategic and financial buyers that resulted in a transaction that saved hundreds of jobs and preserved NRI’s critical supply relationships. Recoveries for all stakeholders far exceeded expectations.
SKD Company (“SKD”) was a tier 1 automotive supplier of manufactured and supplied stampings, components and weldments with annual sales of approximately $500 million. SKD’s main customers were primarily the Big Three North American OEMs, as well as foreign-owned OEMs. SKD carried on operations in Canada from three locations, as well as from locations in the US and Mexico.
We initially acted as the Monitor under the Companies’ Creditors Arrangement Act in SKD’s restructuring proceedings, during which we oversaw SKD’s operations, which continued without disruption due to successfully negotiating a multi-party accommodation agreement among SKD, its senior lender and its customers. The positive cash flow from operations was used to repay in full the senior lender. During the Companies’ Creditors Arrangement Act proceedings, certain portions of the business were sold on a going-concern basis to a competitor. As the proceedings progressed, we were appointed receiver and trustee in bankruptcy. As receiver, we sold SKD’s remaining Canadian facilities and assets. The recoveries were then distributed to unsecured creditors by us, in our capacity as Trustee in Bankruptcy. In order to make these distributions, we resolved complex pension and employee matters. Recoveries for creditors exceeded expectations and a significant number of jobs were saved.
Talhin/T Corporation (“Talhin”) was a supplier of plastic injection molding products to OEMs and other customers in the automotive industry. It operated from two leased facilities in Oldcastle, Ontario.
Due to competitive pressures and continuing losses, Talhin commenced proceedings under the proposal provisions of the Bankruptcy and Insolvency Act. Talhin’s secured creditor subsequently sought our appointment by the Court as receiver and manager. As Proposal Trustee and Receiver we oversaw Talhin’s operations and assisted customers to transition their business to new suppliers pursuant to accommodation agreements entered into with those customers. Continuation of the business during the proceedings also enhanced recoveries on Talhin’s accounts receivable and inventory.