Chicago-based housewares molder Home Products International — North America Inc. is going out of business, blaming rising resin prices and an unsuccessful attempt to sell the company.
The company filed for protection under Chapter 11 of the U.S. Bankruptcy Code on June 6.
"The debtors utilize resin to produce plastic storage products and steel to produce ironing boards. The price of resin and steel has been extremely volatile during the past two years, with resin prices doubling and steel prices tripling," Chief Financial Officer James Auker said in one filing. "The debtors have had only moderate success passing along those price increases to its customer base."
He added the company has not been able to convince its lenders to cover its operating losses, and it was unable to find a buyer for either its plastics or ironing board business lines.
"At this point, seemingly nothing will change the trajectory of the plastics and ironing board business lines. Neither resin nor steel prices are expected to moderate sufficiently in the near future. The supply chain crisis is not expected to change in the near future," he wrote.
The voluntary petition says 200-999 creditors are owed at least $50 million. The privately held company injection molds houseware products for storage, home organization and laundry care, such as totes, carts and bins, for customers including Walmart, Target and Amazon.
Founded in 1952, HPI ranks No. 52 among North American injection molders with estimated sales of $180 million, according to Plastics News' latest ranking.
HPI had announced in March that it was closing its metal ironing board operation in Seymour, Ind., to focus on its plastics business.
Then, two months later, HPI officials notified the U.S. Department of Labor that it was laying off 146 workers at two Chicago facilities, starting May 20. The layoffs included 96 workers at a plant and 50 employees at the company headquarters.
HPI has estimated assets of $10 million to $50 million and estimated liabilities of $50 million to $100 million, according to the bankruptcy petition.
A meeting for creditors is scheduled for July 12.
Several companies in the plastics industry are among HPI's 30 largest unsecured creditors, who are owed a total of $19 million. The top creditors are materials maker Braskem America Inc., which is owed $2.99 million; Sarasota, Fla.-based Material Difference Technologies, $2.86 million; and Garyville, Ind.-based Pinnacle Polymers, $1.87 million.
HPI are in arrears $505,180 to Chicago Mold Engineering; $181,727 to Ann Arbor, Mich.-based Ube Machinery Inc., an injection molding machine manufacturer; $114,282 to Talco Plastics Inc. and $110,127 to TNT Plastic Molding, which are both in Corona, Calif.; and $70,673 to Colors for Plastics Inc. in Elk Grove Village, Ill.
Auker said the unsecured creditors are unlikely to get paid.
The company has lined up a buyer for its Seymour plant, for $3 million, and it has signed an agreement to auction the machinery and equipment at both the Chicago and Seymour plants for no less than $3.8 million.
HPI has filed for bankruptcy before. The company also turned to the courts for protection from creditors in 2006, when it expected to lose more than $30 million on sales of about $224 million. At the time, as part of its reorganization plan, the firm closed its molding site in El Paso, Texas, and consolidated its operations in Chicago.