Johnson Controls Inc. and Magna International Inc. are preparing to close on the purchase of Plastech Engineered Products Inc.'s plastics molding assets. Meanwhile, the U.S. trustee handling Plastech's bankruptcy has asked the court to reject a proposal to pay a $1 million bonus to Plastech management.
Glendale, Wis.-based JCI is scheduled to wrap up its purchase of Plastech's automotive interior assets by June 30. U.S. Bankruptcy Court in Detroit approved the $177 million sale to a JCI limited liability company, JCIM LLC, on June 19.
Magna's exteriors business unit, Decoma International of America Inc., is buying the Plastech exteriors business for $24.7 million. Magna, based in Aurora, Ontario, plans to close Plastech's five exterior products plants.
Plastech, owned by Julie Brown, filed for Chapter 11 protection Feb. 1, after Chrysler LLC canceled its contracts with the supplier.
Prior to its Chapter 11 petition, Plastech was the largest minority-owned supplier in the auto industry, with about $1.4 billion in annual sales.
U.S. trustee Habbo Fokkena has asked a judge to block a motion that would arrange to pay Plastech management a $1 million bonus.
If approved, the $1 million would be split between four tiers of potential recipients.
Fokkena is asking a judge to block the bonus because, he argues, the legal foundation upon which Plastech lawyers base the bonus is unsound. He claims the bonus is an incentive to retain certain employees, while Plastech said it is not a retention incentive, but a reward for efforts to sell off its business units.
A judge will rule on the management bonus June 26.