Another iconic auto parts brand files for Chapter 11 bankruptcy

The automobile industry has battled financial distress at some point of the last year with a few companies filing financial disaster.

The foremost significant financial disaster at some point of the auto industry took place on June 18 when electric vehicle maker Fisker Group filed for Chapter Eleven protection to shut down operations and liquidate its assets.

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Auto parts companies under financial distress consist of e-commerce auto parts retail business PartsID, which filed for Chapter Eleven in December 2023. The corporate sells auto parts to consumers online through quite a bunch web sites, corresponding to TruckID.com, CardID.com and CamperID.com.

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Wheel Pros, which operates as auto parts distributor and retailer Hoonigan, filed for a prepackaged Chapter Eleven financial disaster on Sept. 9 which may perhaps take away $1.2 billion in debt and provide about $570 million in new capital through an exit facility.

Less than the restructuring toughen agreement and prepackaged financial disaster filed at some point of the U.S. Financial disaster Court for the District of Delaware, Wheel Pros reached agreements with its equity sponsor Clearlake Capital Group and lenders for a consensual restructuring which may perhaps hand eighty five% of its new equity interests to holders of first lien claims and the rest 15% to new first-lien lenders who will backstop the debtor's exit term loan.

Accuride seeks a consensual restructuring in financial disaster

Eventually, Accuride Corp, a leading manufacturer of wheels and wheel end products for commercial trucks and trailers, on Oct. 9 filed for Chapter Eleven financial disaster protection in search of a consensual restructuring of its debt to continue operating as a going concern.

Accuride, which produces renowned brands Accuride, Gunite, and KIC, is among the vitally important largest and most diversified manufacturers and suppliers of wheels and wheel end components worldwide. The corporate produces 20 million wheels per year globally and commands Forty% of the North American steel and aluminum wheel market for commercial vehicles.

The corporate distributes its products to original equipment manufacturers of trucks and trailers and to aftermarket distributors.

The Livonia, Mich., wheel manufacturer listed $five hundred million to $1 billion in assets and liabilities in its petition, including $22.7 million owed to its largest unsecured creditor Matalco Inc.

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Accuride and 15 affiliates filed their petition at some point of the U.S. Financial disaster Court for the District of Delaware after facing significant headwinds from the lingering effects of the Covid-19 pandemic on the debtor's business, operational difficulties, business integration challenges, inflation, supply chain disruption, and other geopolitical and macroeconomic forces that depressed revenue and increased costs, based on a declaration by Charles Moore, the debtor's chief restructuring officer.

The debtor's financial distress was once exasperated by sanctions against the Russian Federation for its invasion of Ukraine, which prevented Accuride from getting get entry to to cash from its non-debtor Russian affiliate which was once no longer having financial difficulties.

Accuride's prepetition efforts to apply operational initiatives to toughen its financial situation were unsuccessful. The debtor in June 2024 began negotiations with an ad hoc committee of its first lien term loan lenders for an investment or purchase of some or all of its assets.

The debtor decided its best option was once a post-petition transaction with the ad hoc group under a Chapter Eleven financial disaster reorganization plan. The debtor also reached an agreement with the ad hoc group to supply $103 million in debtor-in-possession financing, which contains $30 million in new money and rolls up $73 million in debt.

Accuride was once founded in 1986 through a carve-out acquisition from Firestone Tire & Rubber Co. The corporate traces its roots back almost one hundred fifty years to when its affiliate Gunite was once founded in 1854 as a manufacturer of bicycle, wagon, and buggy tires.

The wheel maker in 2005 merged with Transportation Technologies Industries Inc., acquiring among the vitally important largest North American producers of truck components for the heavy- and medium-duty trucking industry and the Gunite brand. Following the merger, the company turned right into a dominant parts supplier to the medium- to heavy-trucking industry.

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