Venture Holdings Company, a worldwide manufacturer and supplier of automotive components and systems, filed a petition for Chapter 11 reorganisation at the weekend in the United States Bankruptcy Court, Eastern District of Michigan, the company said in a statement.
Go deeper with GlobalData
Founder Larry Winget announced that the company’s board of directors, at his request, appointed Joseph Day as the company’s CEO. Day, a director of the company since January 2003, is assuming operating responsibility for Venture’s US and foreign operations. James Butler, CFO and general counsel, will remain in those capacities and will focus on banking, treasury, restructuring and legal matters.
“We are filing for Chapter 11 protection as a vehicle to restructure Venture Holdings’ debt in response to events at our European operations that have severely affected our liquidity” said Day. “This action is in the best interests of our customers, employees and creditors, as it will enable Venture to continue to operate as usual in all respects, while we complete the restructuring which will lead to a better and stronger company. We continue to have an outstanding business here in North America as well as in our other foreign operations and are meeting our customers’ delivery and quality expectations daily; while at the same time winning many new orders.”
Because of the extensive discussions conducted by Venture Holdings with its lenders and bondholders prior to the filing, the company anticipates that it will be able to file a plan of reorganisation in the very near future and proceed to obtain the required approvals as soon as practical.
A report in the Detroit News said that Venture’s founder, Larry Winget, has been publicly criticised for mismanaging the company he ran and privately owns and that the Chapter 11 move came after Venture, with about $US1.9 billion in annual sales, was unable to keep a subsidiary, Peguform GmbH, out of German bankruptcy court. German directors filed to declare the firm insolvent and Venture unsuccessfully tried to block the move.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Detroit News said Venture missed a payment to bondholders, who are owed about $455 million, last year, and banks and analysts have been concerned about cash flow between Venture, Peguform and other companies owned by Winget.
According to the newspaper, Venture’s latest annual filing with the Securities and Exchange Commission, for fiscal year 2001, showed the company had $1.4 billion in assets and $894 million in debts. It hasn’t publicly reported annual financial information since, the report added.
According to the Detroit News, the company employs about 13,000 workers, including about 2,000 in Southeast Michigan. Analysts say Venture’s woes seem to be management related, rather than fallout from a weak economy.
The Detroit News said that a Forbes magazine story about Winget, published in the latest edition, accused him of “siphoning off tens of millions from his car parts business, enraging German automakers and US creditors.”
According to the newspaper, James Butler, Venture’s acting CFO, told Forbes that Winget didn’t do anything wrong. The transactions were properly disclosed and were an attempt to diversify the business, he reportedly said.
