DETROIT - Mexican Industries in Michigan Inc. officials admit the company withheld some payments to health-care providers and the United Auto Workers but maintain the money went to shore up the company, not to individuals.
Detroit-based Mexican Industries filed June 25 for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Detroit and has closed the bulk of its molding and assembly operations, idling more than 1,000 employees. But allegations in a suit filed by UAW Local 600 maintaining that the firm's owners misappropriated funds for their own benefit are not true, the company said in a written statement.
``Let us assure you that none of the funds [that] were withheld from any employee's check for union dues or for any other purpose have been paid or otherwise diverted to any shareholder at any time,'' it said.
In fact, the company had suspended dividends to its owners - the children of founder Hank Aguirre, Rance, Pamela and Jill Aguirre and Robin Krych - more than two years ago, the statement continued.
The UAW suit against the four owners alleges they ``diverted in excess of $7 million,'' including funds withheld from employees' paychecks that should have been forwarded to the union and used for health insurance premiums.
The company states its estimates show that no more than $80,000 was due the union. It did not indicate how much money it owed in health-care benefits but said cash also was siphoned to keep Mexican Industries in business.
``The company deferred payments to many of its creditors in an effort to manage its funds so as to continue its business operations and continue to preserve jobs,'' said the statement. ``Ultimately, the company's goal was to reorganize by obtaining a capital infusion or a sale transaction. Although the company came very close to realizing its goal, it was unsuccessful.
``As a result, the company made the decision to wind down its business operations and liquidate in an orderly manner.''
