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 Molds/Tooling, China, Legal

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

Netstal, Electra Form team up for PET preform partnership

November 20, 2014 3:15 pm ET

The Netstal division of Krauss-Maffei Corp. is teaming up with Electra Form Industries in a partnership to offer PET preform machines and molds as a...    More

Image

Molder Carclo expands in China, chasing medical growth

November 19, 2014 3:44 pm ET

U.K.-based injection molder Carclo plc is “significantly” expanding its Chinese medical manufacturing capacity with a new factory, as the ...    More

Image

Illinois mold maker adds machinery, renovates to improve work flow

November 18, 2014 1:23 pm ET

Injection mold maker Industrial Molds Inc. is adding $1.7 million in new machinery, the company has announced.    More

Image

Zahoransky system squeezes more production time out of molds

November 17, 2014 6:00 am ET

Freiburg, Germany-based mold and automation systems maker Zahoransky Formenbau GmbH has developed a new technology which allows for assembling and...    More

Green Fence boon for China, group says

November 14, 2014 1:04 pm ET

China's Green Fence rules and regulations regarding the import of scrap materials will prove to be a “long-term” boon for the recycling in...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

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

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

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events