PPI Holdings, Inc., an industrial parts manufacturer, filed for bankruptcy in Delaware on December 12, 2008. As stated in the Declaration in Support of PPI’s First Day Motions, PPI designs and manufactures metal stamping in a process known as “fineblanking.” In addition to the automotive market, PPI’s products are used in the construction, agriculture and lawn and garden industries. Based in Rochester Hills, Michigan, PPI operates six manufacturing facilities in North America. Read the PPI petition for bankruptcy here.
Why PPI Filed for Bankruptcy
PPI’s success is tied, in large part, to the U.S. auto industry. Almost 40% of PPI’s revenue in 2007 came from sales to manufacturers in the automotive industry. Lower volume in the auto industry, combined with higher steel prices, reduced PPI’s revenue and cash flow, which in turn led to bankruptcy.
First Atlantic Capital acquired PPI in 2005. PPI operates under two primary entities: MPI International, Inc. and Skill Tool and Die Holdings, Corp. MPI designs and manufactures metal components used in automobile brakes, engines and transmissions. Skill Tool manufactures parts through stamping.
In 2007, PPI’s sales reached $197 million. As of its petition date, PPI had $185 million in long term debt, plus trade debt totaling $30 million. According to its bankruptcy petition, PPI lists the following as its ten largest unsecured creditors:
- Golub Capital … $42 million
- Norwest Mezzanine Partners … $42 million
- Gestamp North America … $4.8 million
- Chrysler … $3.2 million
- Gilbraltar Industries $3.1 million
- Steel Warehouse Co. … $1.9 million
- Heidtman Steel Products … $1.5 million
- Samuel Son & Co. … $1.1 million
- General Motors … $728,281
- Ford Motor Co. … $688,446
First Day Orders
The PPI bankruptcy is before the Honorable Kevin Gross. Judge Gross entered orders granting PPI’s first day motions on December 15th. Included among the first day orders are (i.) an order authorizing PPI to pay prepetition critical vendor claims; (ii.) an interim order authorizing PPI to obtain postpetition financing; and, (iii.) an order authorizing PPI to honor prepetition customer claims. Pepper Hamilton represents PPI in this bankruptcy proceeding.