From Detroit Free Press Bank One Corp. has filed a foreclosure lawsuit against bankrupt auto supplier Venture Corp. and related companies owned by its former owner, Larry Winget.
The bank says it’s not trying to close down Venture or disrupt its operations, but it wants to ensure that the businesses owned by Winget are merged back into Venture. The suit was filed Tuesday.
“This is being done so Venture has a workable future, so it could maybe be sold and the bank and other creditors can get some money back. The automakers are 100-percent behind this because they want to see the company have a future,” said a top automaker purchasing official who asked not to be named.
Venture had an unusual arrangement in which much of its land, tools and patents were not owned by the company but by smaller companies owned by Winget or his family members.
Lawyers familiar with Venture’s bankruptcy said this arrangement made it unlikely anyone would want to buy Venture.
Winget owned Venture until its bankruptcy in March 2003. Because of the bankruptcy, he and Venture are now seen by the law as different entities.
“We believe this statement in the complaint shows that Bank One and the Debtors (Venture) share the common goals of keeping the business open, protecting our employees’ jobs and continuing to provide high quality products,” said David Barnes, Venture’s in-house lawyer in a statement.
Bank One, the agent for Venture’s debt from before its Chapter 11 bankruptcy filing, said it wants to foreclose the outside businesses owned by Winget only and try to keep Venture afloat. Bank One said it wants any new owner of Winget’s outside companies to agree to work with Venture.
The outside companies controlled by Winget and his family are accused by Venture’s new management and their unsecured creditors of siphoning $314 million from the company over the last several years, according to a lawsuit filed last week in U.S. Bankruptcy Court in Detroit.
Winget’s attorneys have said that “virtually all” of the Winget-family transactions with Venture were “fully disclosed.”
Venture posted sales of about $1 billion in 2003 and is Michigan’s 16th-largest privately held company, a Free Press study found. The company employs 2,000 people in metro Detroit and 13,000 globally.
Copyright 2004 AFX News Limited. All Rights Reserved.
Click here to view the rest of today’s headlines.