Steel Parts Corporation Announces Chapter 11 Bankruptcy Filing

DETROIT, Sept. 18 -- Steel Parts Corporation announced today that due to worsening conditions in the automotive supplier marketplace and unsustainable debt, Steel Parts filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Eastern District of Michigan in Detroit on Friday, September 15, 2006.

Over the past year, Steel Parts undertook an extensive analysis of the options available to it and the impact each of those options would have on its employees, suppliers, customers and creditors. As part of this analysis, Steel Parts assessed the value of its enterprise and assets. Steel Parts determined that, in order to maximize the value of its assets for its customers, suppliers and employees, it was necessary to continue production under Chapter 11 protection in order to best protect the interests of all of its constituencies.

Steel Parts deeply regrets this outcome and the painful impact this filing will have on its valued employees, customers, suppliers and the communities that have supported it over the years. Unfortunately, market conditions and Steel Parts' financial situation have made this very difficult decision unavoidable. Steel Parts will use its best efforts to ensure a seamless transition to operations under Chapter 11 protection and will continue to work with its suppliers, customers and employees to minimize the impact of this bankruptcy filing.