TORONTO — Canadian proprietary molder TPI Plastics Inc. may have to write off US$100,000 following the loss of a legal appeal in the Pay 'N Pak Stores Inc. bankruptcy.
TPI is not eligible to receive the money it says it is owed because of ``an arcane aspect of the bankruptcy law,'' said TPI President Donald Henderson in Toronto.
In September 1991, retailer Pay 'N Pak filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The law says a supplier cannot change terms of sale in the 90 days prior to such a filing. Henderson acknowledged TPI changed some terms, which he said was ``our error,'' but contested the bankruptcy court's jurisdiction over a claim involving a Canadian firm.
Henderson said he believes the value of the TPI proof of claim has grown to $100,000 through compounding of interest.
TPI unsuccessfully appealed the bankruptcy in the Ninth U.S. Circuit Court of Appeals in San Francisco. Henderson is pondering whether to ask the U.S. Supreme Court to consider the matter, or take an accounting charge for the $100,000 loss.
TPI wrote off US$55,000 in 1991, but continued to supply the retailer as debtor in possession until 1993, when Pay 'N Pak filed for liquidation, giving rise to the current claim.
TPI employs 150 and has annual sales of about US$14 million from lawn, garden and holiday products. Six blow molding and six injection molding machines operate in a 200,000-square-foot plant in Coaticook, Quebec.
Beginning in 1960 as Tucker Plastic Products Ltd., TPI was a subsidiary of a predecessor of Tucker Housewares of Leominster, Mass. TPI sold the Tucker Plastics name back to Tucker Housewares in 1994, and Zeta Consumer Products of Little Falls, N.J., purchased Tucker Housewares in June 1996.