Automotive supplier North American Plastics Corp. has joined the list of companies entering Chapter 11, forced into bankruptcy by what its lawyer said is one skittish creditor.
North American Plastics, based in Grand Rapids, Mich., was in the midst of an out-of-court workout, setting up the ground rules to pay off debts dating back several years, said Charles D. Bullock, a lawyer for the company. But when an ``antsy'' individual pushed for payment, the company was forced to file for protection Feb. 19 in U.S. Bankruptcy Court in Grand Rapids. The firm aims to clean up its books and emerge under its own power by the end of this year.
``We're taking care of the bottom line and reorganizing in an orderly basis,'' Bullock said.
Preston Jones bought a majority ownership in the former Master Plastics Inc. in 1997. A producer of grilles and interior parts, the company went from annual sales of $1.6 million to more than $8 million within two years.
Production is continuing while the company is in Chapter 11, Bullock said.
``We've kept our quality control very high, kept all the production requirements in place,'' he said.
Clarion Technologies Inc., also based in Grand Rapids, holds a 49 percent stake in the certified minority-owned business. While North American Plastics works to clean up its books, Clarion borrowed $3.4 million for continued operating capital. Clarion would say only that the lender is an existing one, a director and an officer of the company.
Like its joint venture, Clarion has been battling continued business pressure. It posted nearly $83.5 million in sales through the first nine months of 2001, down from about $85.5 a year earlier. But the company posted a loss of $24.6 million for the period, compared with a net loss of $1.7 million for the same time in 2000.
The publicly traded company recently lost a fight against having its shares delisted by Nasdaq when its stock price dropped below $1 per share last year. It began trading March 13 on the over-the-counter bulletin board.
Executives with Clarion did not return calls requesting comment.