The banks and secured creditors of bankrupt auto supplier Venture Holdings Co. LLC are trying to jump-start a reorganization with or without founder Larry Winget.
Lenders led by Bank One NA took over and appointed new directors to nine companies outside of Venture that Winget owned. Those companies last week filed for Chapter 11 bankruptcy and the creditors probably will try to combine that case with Venture's case.
The idea is to force Winget to roll those companies into Venture, a move creditors believe is critical for Venture to emerge from Chapter 11.
Winget, who no longer holds a position at Venture, is trying to maintain control and is likely to fight the banks' action, said Ralph McKee, his Detroit-based lawyer.
Venture's Chapter 11 case has been dogged by lawsuits and disagreements to the point where customers, including General Motors Corp., expressed concern about a lengthy case. Fraser, Mich.-based Venture filed its Chapter 11 petition in March 2003. It is a major supplier of plastic components and bumper fascias to GM, Ford Motor Co. and DaimlerChrysler AG and reported about $1 billion in sales last year.
Winget still controls companies that are separate from Venture and are not part of this month's bank takeover. Chief among them are companies that own plants in Australia and South Africa. The banks and secured creditors said they will try to force Winget to contribute those.
The moves are outlined in a new disclosure statement, approved by U.S. Bankruptcy Judge Thomas Tucker last week. Creditors are voting on an amended reorganization plan and a confirmation hearing is set for June 17.
But it might not be that simple.
Last week Winget withdrew his offer to roll the outside companies into Venture, saying that changes in the plan are adverse for him. That gives him the right, according to the plan, to cancel that part of the deal, McKee said.
Also, Venture is suing some of the firms the banks now control. Earlier this year the company took the unusual step of suing its owner, Winget, and firms owned by him and some of his family. The lawsuit accuses Winget and the outside companies of taking $314 million from Venture by way of work paid for but not performed, and rents and leases well above market value.
Winget since has resigned from Venture's board. His lawyers said the transactions in the lawsuit were all aboveboard and disclosed in Securities and Exchange filings.
McKee noted that the banks chose Venture Chief Financial Officer Kenneth Anderson to be chief executive officer of the outside companies taken over by the banks and secured creditors. That puts him in a conflict since the two sides are on opposite ends of a $314 million lawsuit, he said.
He also questioned the banks' and secured creditors' authority to take over the outside firms.
``We have serious questions about the appointment of directors and a CEO,'' he said. He said Winget may file a motion to dismiss the banks' authority to take over the outside companies.
The unsecured creditors, who opposed the first reorganization plan, approved the new one. The original plan called for Winget, in return for rolling his outside companies into Venture, to get all of the stock of a reorganized company. Then unsecured creditors would receive stock proportional to their debt.
That's still the case. But the secured creditors have agreed to pay unsecured creditors two-thirds of money they recover over a set amount. That amount has not been determined.
The bankruptcy action comes on the heels of a May 20 announcement that one of Venture's European facilities will shut down this summer.
Peguform UK Ltd. in Luton, England, will cease production July 9, said Robert Game, human resources manager. The firm was directly owned by Venture.
``It's hard to convince the [automakers] to place business here, considering the situation of our parent company,'' he said.
The Luton plant employs nearly 200. Potential buyers for the building and equipment have checked out the holdings, but no action on the sale of any assets is expected until after production halts, he said.
Plastics News staff reporter Rhoda Miel contributed to this story.
