Wheel supplier Accuride files Chapter 11 papers for U.S. operations

Court filings show that Accuride’s slide toward a Chapter 11 filing—which comes 15 years and one day after the company filed for bankruptcy in the wake of the Great Recession—was the result of a number of factors.

Prominent among them was a spike in costs during the COVID-19 pandemic and resulting supply-chain snarls. But executives also took longer than expected to integrate the mid-2018 acquisition of German firm Mefro and said they couldn’t nurse an Ontario wheel-end plant to profitability. Both of those efforts took extra time and money.

On top of those events, the current freight recession has cut into demand from truck OEMs. That, Moore wrote, led Accuride’s leaders to stretch suppliers’ payment terms or move around orders. That prompted some vendors to tighten their terms or worse: Baltimore-based Hydro Aluminum Metals USA LLC took Accuride to court in May over $4 million worth of aluminum orders and was granted summary judgment for that amount just before Labor Day.

By late spring, Accuride’s leaders were shifting their restructuring efforts into a higher gear. They began making bridge loans that have totaled $65 million since June—nearly $18 million of which has gone to keeping Accuride in good standing on its asset-backed loans—and hired investment bankers to shop parts of the company. But those efforts—31 entities signed non-disclosure agreements, seven of which later signaled interest in a deal—has not provided an offer Crestview could accept.

“While these efforts have not yet borne fruit in the form of an actionable bid, they have served as a basis for the debtors and their lender to coalesce around a path forward,” Moore wrote in his initial declaration to the bankruptcy court.

Separately, Accuride’s leaders are looking for bidders for the Canadian arm of the business. Even though that operation isn’t part of the Chapter 11 process, it continues to need new capital from the broader organization, and executives plan to ask for protection from its creditors.

In addition to Hydro, the company’s largest unsecured creditors that are not insiders (plus the amount they are owed but, per Accuride’s bankruptcy petition, won’t receive) are:

• Matalco Inc. in Ontario – $22.8 million
• Zhumadiam Cimc Huajun Casting Co. Ltd. in China – $12.6 million
• Trailer Master Cvs Inc./Panasia Logistics, also in China – $7.2 million
• Termium Mexico SA de CV – $6.5 million
• Heidtman Steel Products Inc. in Toledo – $3.8 million
• Ellwood Aluminum in Hubbard, Ohio – $3.7 million