Canadian composites parts maker Sigma Industries Inc. filed July 16 for bankruptcy reorganization in Canada. Its U.S. subsidiary in Jefferson, Ohio, filed for Chapter 11 in December.
In June, Sigma Industries got a $5 million government loan in Canada to enable the company to make it through the severe economic crisis affecting the industry, according to a news release. That loan came from Investissement Quebec, through the Quebec Department of Economic Development.
The company plans to file its reorganization proposals with the court Aug. 3. Company officials could not be reached for comment, but a Sigma news release said the reorganization moves do not have any effect on the ordinary course of the businesses of Sigma and its units.
Sigma Industries employs 350 in Canada and the United States making composite and metal components for heavy-truck, train and subway, wind energy, machinery, agricultural and forestry markets. Quebec City-based Sigma Industries, and its subsidiaries Rene Composite Materials Inc. and Transcam Composites Inc., filed for reorganization bankruptcy in Superior Court of Quebec.
Meanwhile, officials in Ashtabula County, Ohio, are rejecting a request by Sigma OH Industries Inc., the U.S. subsidiary, to forgive a $500,000 loan in exchange for a promise to create 50 permanent jobs.
Sigma Industries made its first production move in the United States in 2008, by purchasing Pickens Plastics, a fabricator of glass-reinforced plastics parts with a factory in 125,000-square-foot factory in Jefferson and a 50,000-square-foot warehouse in Ashtabula, Ohio.
Sigma OH Industries filed for Chapter 11 reorganization Dec. 1 in U.S. Bankruptcy Court in Cleveland. The company listed total assets of $7.9 million and total liabilities of $27.5 million, which included a total of $4.8 million in loans from the Ohio Department of Development, and the $500,000 loan from the Ashtabula County 503 Corp.
All the government debts loans are secured loans, according to court documents.
Sigma OH Industries asked for the deal to eliminate the $500,000 revolving loan, but the Ashtabula County 503 Corp. board voted against that, said John Dolan, director of the 503 Corp., which administers the money from the state of Ohio. Ashtabula County Commissioners have the final vote, and President Joe Maroski said commissioners are expected to reject the offer when they meet Aug. 3.
Dolan said Sigma OH Industries employs about 45 people in Jefferson and Ashtabula. The Ohio subsidiary has hired Parkland Group Inc., a turnaround specialist in Cleveland, as its financial adviser.