Electronic enclosures maker Trend Technologies Inc. has filed for Chapter 11 bankruptcy protection.
Trend, headquartered in Chino, Calif., has experienced a major slowing in its core markets for computer and telecommunications enclosures.
The Nov. 7 filing with the U.S. Bankruptcy Court in Wilmington, Del., covered numerous Trend operating affiliates. Trend reported 2001 global sales of $523.9 million.
According to the filing, Deutsche Bank Trust Co. Americas, a lenders' agent in New York, is the top creditor with $206 million in term and revolving loans from March 2000.
The other largest other unsecured trade creditors include units of Huntersville, N.C.-based GE Polymerland; Delta Electronics of Fremont, Calif.; and Hipro Electronics Inc. of Austin, Texas.
Trend operates about 285 injection molding machines in North America, Europe and Asia, but the soft economy has precluded keeping volumes sufficient to keep the business operational.
Trend is winding down production at a Round Rock, Texas, facility that opened in early 1998. Major customer Dell Computer Corp. strongly encouraged Trend to establish the 120,000-square-foot molding-stamping-assembly plant near Dell's headquarters but later decided to move work elsewhere, particularly to Mexico and Asia.
The Trend plant in Guadalajara, Mexico, expanded dramatically to cope with an influx of business from Dell and others, but that site is experiencing a softening of demand.
Trend had closed an Albuquerque plant in July and a San Diego site in mid-2001.
Industry observers said it is likely that Earl Payton, Trend president and chief executive officer, will seek to buy assets through the bankruptcy process.
Payton led the sale of Cowden Metal Specialties Inc. of Chino to Trend in late 2000 and took management control of Trend in February. In that shakeup, Payton succeeded Bill Hobbs as CEO.
Margins have become razor-thin or nonexistent, and many of the Trend product offerings have transitioned into commodities from one-time profitable lines.
Even Payton's beloved metal business has decreased in production volume despite major commitments to lean manufacturing practices. Customers want enclosures without the expense of metal and have sought to switch to plastic in many applications.
Sales at the Chino plant with its substantial metal stamping capability have dropped precipitously in recent years.
Trend's directors retained Crossroads LLC of Irvine, Calif., at a Sept. 22 board meeting. A team of Crossroads consultants, acting as chief restructuring officer, has been analyzing Trend finances at the Chino offices.
Christopher J. Wallis, a Trend director and authorized agent, certified the board resolutions. Wallis is affiliated with fund operator Doughty Hanson & Co. Ltd. The London-based firm acquired 90 percent of Trend in early November 2000, paid off high-priced debt and facilitated acquisitions such as Cowden.
Laura Davis Jones with the Wilmington law firm of Pachulski Stang Ziehl Young & Jones is representing Trend.
Numerous Trend competitors have faced similar softness with pricing pressures and volume cuts from original equipment manufacturers and the supply chain.
