Stant Corp., Car Fuel-Systems Maker, Files Bankruptcy
July 28 -
Stant Corp., a 111-year-old maker of automotive fuel systems, fuel and radiator caps and thermostats, filed for bankruptcy protection.
Stant, which was purchased by Miami-based private equity firm HIG Capital LLC from Tomkins PLC in June 2008, said it is seeking to sell its assets in bankruptcy, citing the global economic decline, high debt levels and the bankruptcies of General Motors Corp. and Chrysler LLC.
“Approximately half of the debtors’ business is dependent on the domestic auto industry,” Philip Fitzpatrick, chief financial officer of Stant’s parent company, said in a declaration filed with the bankruptcy court. “It is without question that the North American automotive industry is in a period of dramatic turmoil.”
Stant said it has between $50 million and $100 million in assets and debts, according to a Chapter 11 petition filed yesterday in Wilmington, Delaware. Five affiliated companies also filed for bankruptcy protection.
The Connersville, Indiana-based company, which started as a family-owned engine-repair shop in 1898, began manufacturing auto parts after World War I, including the 1928 Ford Model A Flying Quail radiator cap, the company said on its Web site.
At the time of the sale to HIG, pricing, contracting and budgeting errors contributed to Stant overestimating its expected future earnings, leaving the company overleveraged, Fitzpatrick said. Fitzpatrick blamed the errors on a lack of internal controls at the company.
To save money, Stant in the past year raised prices, cut the number of employees by 30 percent and closed a facility in Waltham, Massachusetts, Fitzpatrick said. Stant has lined up $11 million in debtor-in-possession financing from HIG and GMAC Commercial Finance LLC, he said in the declaration.
The case is In re Stant Parent Corp., 09-12647, U.S. Bankruptcy Court, District of Delaware (Wilmington).
LINK:
Stant Corp., Car Fuel-Systems Maker, Files Bankruptcy (Update2) - Bloomberg.com
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