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Two of JPE Subsidiaries Have Filed for Protection From Creditors

16 September 1998

JPE Inc. Announces That Two of Its Subsidiaries Have Filed for Protection From Creditors Under Chapter 11

    ANN ARBOR, Mich.--(AutomotiveWire)--Sept. 15, 1998--JPE Inc. (OTC BB:JPEI) today announced that two of its operating subsidiaries, Plastic Trim Inc. and Starboard Industries Inc., filed voluntary petitions for relief under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan.
    Under Chapter 11, the companies will continue to operate their respective businesses in the ordinary course under the protection of the Bankruptcy Court while seeking to work out a plan of reorganization to provide for the payment of their respective creditors. GMAC Business Credit has agreed to provide debtor-in-possession financing to each of Plastic Trim and Starboard Industries pursuant to the terms of a consensual post-petition financing order submitted to the Bankruptcy Court by the debtors, GMAC Business Credit and JPE's bank group.
    Donna L. Bacon, president of JPE Inc., stated, "The major customer of both Plastic Trim and Starboard is General Motors Corporation. Upon the end of the U.A.W. strike against General Motors, JPE's bank group was unwilling to provide necessary working capital to resume normal production levels. The decision to file for protection under Chapter 11 for Plastic Trim and Starboard Industries will permit those companies to fund ongoing operations and ensures continued production on behalf of their customers; and will allow JPE the financial flexibility it requires to continue funding for JPE's other businesses. The formulation of a plan of reorganization may include the restructuring of liabilities or the sale of all or substantially all of these companies' assets."
    Ms. Bacon further stated, "The filing of these two companies does not affect JPE's other operating subsidiaries, Allparts Inc., Dayton Parts Inc. and Industrial & Automotive Fasteners Inc. These three subsidiaries remain profitable and it is anticipated that their operations will continue to be funded through the Company's secured lending facility. We intend to continue to explore all possibilities to restructure the Company's indebtedness, including the possible sale of operating businesses, obtaining equity financing and seeking subordinated or senior indebtedness. It is possible, however, that our efforts will not yield sufficient proceeds to provide a recovery to our shareholders."
    JPE also announced that John Psarouthakis, the founder of JPE, resigned his positions as chairman and chief executive officer and as a director of JPE Inc. Ms. Bacon was elected to the additional position of chief executive officer. James J. Fahrner was elected to the additional position of chief operating officer.
    The statements contained in this press release which are not historical facts are forward looking statements. The Company's actual results may differ materially from those projected in its forward looking statements, including, but not limited to the cooperation from and continued funding by the Company's and Plastic Trim's and Starboard Industries' respective lenders; and the timing of and proceeds from either the Company's sale of its businesses or the adoption of a plan of reorganization. In addition, various factors discussed in the Company's various reports filed with the Securities and Exchange Commission may affect such forward looking statements.