CHICAGO Empire Die Casting Co. Inc. has filed for Chapter 11 bankruptcy protection and is seeking court approval to be acquired by a company that would operate it as a going concern.
The Macedonia, Ohio, aluminum and zinc cast parts maker cited production problems as well as high labor and freight costs as reasons for filing the petition, according to documents filed in U.S. Bankruptcy Court in Ohio.
Empire Die Casting, owned 97.7 percent by chairman and chief executive officer Richard Rogel, also blamed its troubles on the "ineffective implementation" of a new enterprise resource planning system, according to court documents.
The company has "robust capabilities providing precision cast parts to customer specifications" but has "confronted several operational and financial challenges that have strained its resources," president Robert Hopkins said in an affidavit.
Empire Die Casting, which according to Hopkins recorded sales of $34 million in its last fiscal year, estimated its assets at between $10 million and $50 million and its liabilities at between $1 million and $10 million.
The top unsecured creditors include The top unsecured creditors include Imperial Zinc Corp., Chicago, owed nearly $1.8 million; Eastern Alloys Corp., Maybrook, N.Y., owed $423,759; Arco Alloys Corp., Detroit, owed $175,785; Aluminum & Zinc Metal Sales Inc., Monroe, Mich., owed $120,706; and E.A. Aluminum Corp., Maybrook, N.Y., owed $90,339. Other unsecured creditors include Akron, Ohio-based energy company Ohio Edison, owed $84,257; and Accu-Die & Mold Inc., Stevensville, Mich., owed $66,500.
Empire Die Casting retained Amherst Capital Partners LLC on Aug. 13 to find a buyer for the company, Hopkins said in his affidavit. Amherst had found "a number of parties" potentially interested in acquiring the companys assets as a going concern, and the company is seeking court authority for a sale, he added.
Of Empire Die Castings 211 employees, 169 are hourly workers represented by Industrial Maintenance and Vending Machine Service Employees union Local 416, which is affiliated with the International Brotherhood of Teamsters, Hopkins said. The companys contributions to the unions pension fund "are a substantial source of ... financial stress," he said.
In addition, "production inefficiencies" had caused "inflated overtime costs," Hopkins said.
Empire Die Casting is seeking court approval to pay claims related to tooling necessary for its operations, Hopkins said, noting that the companys ability to market and sell itself as a going concern could be jeopardized if work were to be stopped because tooling necessary for production was not available.
Three years ago, the company was slated to receive an $835,000 industry-efficiency award as part of the American Recovery and Reinvestment Acts State Energy Program (amm.com, Feb. 9, 2010).