TORONTO — Auto parts maker Versatech Group Inc. has obtained protection from creditors through the province of Ontario's Companies' Creditors Arrangement Act. Protection extends to the company and four of its subsidiaries: plastics injection molder Tarxien Components Corp., Versatech Canada Ltd., Versatech Sealing Systems Inc. and Apex Metals Inc. Not protected are its Hi-Craft Engineering Inc. subsidiary, which insert molds thermoplastic parts and assemblies, and its 49 percent interest in Commonwealth Regal Industries Inc.
Versatech of Toronto announced May 5 that it received a protection order from the Ontario Superior Court of Justice.
The firm said it will continue business and its principal banker, Canadian Imperial Bank of Commerce, will continue to provide credit under a debtor-in-possession arrangement while Versatech works out a plan of compromise and arrangement to present to creditors. PricewaterhouseCoopers Inc. of Toronto has been appointed interim receiver.
Versatech said its former chief executive officer, Ian Macdonald, and former president and chief operating officer, Rob Lee, have resigned as officers of the company. Macdonald will advise Versatech as a consultant and both men will continue as Versatech directors.
Versatech got court protection a few days after it said CIBC demanded full payment for all debts and liabilities owed the bank by Versatech and related companies. The firm owed the bank C$78.5 million (US$52.7 million) April 30.
Versatech's operating subsidiaries in the United States, Canada and Mexico make interior and exterior door-handle assemblies, interior trim, molded plastic components, plastic and metal and rubber subassemblies for under-the-hood and powertrain systems, plastic tooling and reusable systems for auto-part packaging. It has seven operating subsidiaries and a joint venture and employs about 1,750.