Feng Ping, Chinese toolmaker with Chicago ties, declares bankruptcy

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: December 17, 2013 5:08 pm ET
Updated: December 17, 2013 5:22 pm ET

Image By: Steve Toloken James Fiocchi, managing director of Feng Ping Tooling & Plastics Mfg. Co. Ltd.

Related to this story

Topics Legal, China, Molds/Tooling

Feng Ping Tooling & Plastics Mfg. Co. Ltd., at one time a fast-growing mold making shop in southern China started by two brothers from Chicago, abruptly closed Dec. 16 and filed for bankruptcy.

Feng Ping’s story, however, is a little more dramatic than most bankruptcies.

For starters, there are allegations of 19 employees embezzling $4.5 million to start a competing company.

Right now, the company says its factory campus in Dongguan, Guangdong province, is being blockaded by vendors, who are apparently worried they won’t get money they’re owed.

As well, its remaining 270 workers, who were not getting paid, “loot[ed]” the factory on Dec. 15 and “[took] out everything they [could] carry,” according to a Dec. 16 notice issued by Feng Ping.

And in a twist that reads like it’s from the pages of a spy novel, Feng Ping said the blockading vendors effectively prevented the American owners, James and John Fiocchi, from leaving the factory for 13 days, until the men made a nighttime escape in the trunk of a car.

In the meantime, molds belonging to some Feng Ping customers are apparently trapped in the factory.

Reached by telephone in the United States, managing director James Fiocchi said he was able to remove several hundred molds owned by customers. But he said several hundred more remain inside the factory.

Fiocchi said the situation remains in flux, and he said the company is trying to resolve it. But in that Dec. 16 letter to customers, Feng Ping conceded that it is unable at the moment to remove molds.

“[Due] to the current situation… there is NO [emphasis by Feng Ping] authorized representative at Feng Ping Tooling at this time that can guarantee transfer or return partially built molds,” the company said. “Customers working with ex-employees to retrieve unfinished or finished tools, do so at their own risk. We are told the court will eventually appoint someone to do this.”

The company’s notice said it had filed for bankruptcy in local courts.

“It is with regret and sadness that we must inform our customers that Feng Ping Tooling & Plastics Mfg. Co. Ltd. has filed for bankruptcy with the PRC Court of Dongguan, China,” it said. “Effective Dec. 16, 2013, Feng Ping Tooling & Plastics Mfg. Co. Ltd. is closed for business.”

Fiocchi declined to offer details, saying negotiations continue. But Feng Ping’s letter to customers provides a detailed timeline of a situation that seemed to spin out of control in recent weeks.

It alleges that from August 2012 to July 2013, a top manager and 18 other employees executed a plan to embezzle an estimated $4.575 million from Feng Ping. The plan involved 33 vendors, Feng Ping alleged in the letter.

When the alleged embezzlement was discovered in July, the employees were fired, according to the letter. But in September they opened a competing mold shop and solicited Feng Ping customers, the company said. That allegedly included recruiting 12 people still at Feng Ping to feed them quotations and confidential customer information.

Feng Ping said it began a recovery plan in September, cutting its work force by 50 percent over two months to make payments to vendors.

But, according to the company, by Nov. 1, Feng Ping’s vendors were becoming uneasy, and “threaten[ed] the lives” of several top people who remained at the company, including the new factory manager.

By Nov. 15, Feng Ping decided to sell $2 million worth of equipment to pay down vendor debt. But that did not calm the situation.

“The moment the first piece of equipment was to be sold, more vendors blocked the gates with big trucks because they did not think we would use the money to pay them,” the company said.

By Nov. 18, “nothing [could] get in or out,” the company said in the Dec. 16 letter. “The equipment can’t be sold to pay them so there is a stalemate that exists to this day.”

Until the troubles, the company had seemed to enjoy a quick rise. Although it only started in 2008, Feng Ping had grown to several hundred employees. It adopted a high profile, with the brothers giving frequent interviews to trade press, including Plastics News.

They took a large booth at the NPE 2012 show in Orlando, hosted visits from U.S. government officials, and also garnered write-ups in Bloomberg News and a mention in a story in the Chicago Tribune.


Comments

Feng Ping, Chinese toolmaker with Chicago ties, declares bankruptcy

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: December 17, 2013 5:08 pm ET
Updated: December 17, 2013 5:22 pm ET

Post Your Comments


Back to story


More stories

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International...    More

Image

Green trend boosts plastic building materials business in China

August 29, 2014 9:42 am ET

The greening of China's domestic building materials market is giving the plastics industry a boost.    More

Image

Concours adding equipment as mold making business booms in Mexico

August 28, 2014 2:05 pm ET

Concours Mold Inc. is heading for a 50 percent increase in sales in Mexico this year after a $4 million upgrade of its plant in Huejotzingo, in the...    More

Image

Canadian mold maker Thibault adding to new operation in Mexico

August 27, 2014 3:19 pm ET

Canadian mold maker I Thibault Inc has purchased an established Mexican company, Tecnimoldes SA de CV, for a seven-figure-dollar-sum and renamed it...    More

Image

Lakeland Mold changes name to Avantech to reflect changing business

August 26, 2014 11:53 am ET

Lakeland Mold Co., which makes cast and machined aluminum tooling for the rotational molding industry, is evolving and has changed its name to Avantec...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events