by Jeffrey McCracken
Detroit Free Press Business Writer
FRASER, MI — Bankrupt auto supplier Venture Corp. plans to put itself up for sale to see if there is any interest in the Fraser firm’s assets or business contracts, say lawyers and others familiar with the struggling company.
Venture, which makes plastic parts such as instrument panels for the auto industry, has asked the U.S. Bankruptcy Court in Detroit for permission to market the company. A hearing to get approval and determine how marketing would be handled is scheduled for March 11.
Venture has sent out one-page letters to potential buyers, according to an automotive executive familiar with Venture. The executive said Venture’s operations in the U.S., France and Britain would be up for sale. Not included are Venture’s operations in Germany, Spain and South Africa.
“There are pleadings pending in which the debtor (Venture) is asking to conduct marketing of the assets. I can’t comment beyond that,” said Larry Nyhan, a Chicago lawyer representing the banks in Venture’s bankruptcy.
Venture had annual sales of $1.8 billion before it filed for Chapter 11 bankruptcy in March 2003. Venture, one of the world’s largest auto-plastics suppliers, employed almost 13,000 people as of last year, including 2,000 in Fraser, Troy and Clinton Township. About 85 percent of its sales are with Detroit’s three automakers.
Through its Detroit law firm of Foley & Lardner LLP, Venture declined to comment.
Lawyers working with Venture’s creditors said potential buyers might be scared off because many of Venture’s patents and much of its real estate aren’t owned by Venture but by Venture’s owner, Larry Winget.
“I think it will be difficult to see a third party coming in because Larry Winget owns the patents and they’d have to deal with him if they bought the business. I guess, if anything, I could see Winget trying to buy it,” said Joel Applebaum, a Detroit lawyer representing Venture’s trade creditors.
Venture’s bankruptcy has angered vendors and customers. Trade creditors have accused Venture and Winget of conduct similar to the scandal at energy-trading giant Enron Corp., saying millions went to Winget, who owned 100 percent of Venture. Many of Venture’s largest suppliers are also owned by Winget.
Meanwhile, automakers are frustrated that Venture is still in the unstable position of bankruptcy reorganization. Venture filed a plan of reorganization last October, but the plan wasn’t approved and expired Wednesday.
Venture also has no commitment of financing from a bank or another source to keep it going if it exits bankruptcy.
A company in bankruptcy reorganization needs so-called exit financing to prove to a bankruptcy judge the company can survive without the court protecting it from those it owes money.
Because of the bankruptcy, automakers are reluctant to give Venture new business, making its future uncertain.
“Venture has tried to get financing from private-equity firms and they’ve walked away because it was too dangerous, had too many troubled operations,” said Jim Gillette, director of supplier analysis for CSM Worldwide, a Novi-based auto-research firm.
Gillette said if any supplier were to buy Venture, it might be a foreign auto-plastics firm that wanted to add U.S. business.
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