Nyloncraft Inc. will pay nearly $2 million to pay off its debt to Dura Automotive Systems Inc. for the plants it bought in 2002 to create Nyloncraft.
Nyloncraft and Dura originally had agreed to a $41 million payment in a management buyout backed by private equity group HKW Capital Partners II LP for three injection molding plants.
The purchase terms included a $6 million subordinated loan, with a $4 million payment in February 2007 and the rest due in February 2008, the companies noted in documents filed Feb. 1 with U.S. Bankruptcy Court in Wilmington, Del.
Dura, based in Rochester Hills, Mich., entered Chapter 11 bankruptcy protection in 2006, and it is working to complete a plan for re-emergence.
Nyloncraft, based in Mishawaka, Ind., did not make the 2007 payment because of obligations due to its primary lenders, the court documents stated. The company also recently downsized, closing its Bowling Green, Ky., plant to consolidate operations in Mishawaka and Jonesville, Mich.
The settlement submitted by both companies to the court calls for Nyloncraft to pay $1.99 million to pay off the note. The company stated it can make the payment shortly after receiving court approval for the plan.