Cadence Innovation Files For Chapter 11 Reorganization

Cadence Innovation has filed voluntary petitions for reorganization in a Delaware Federal Bankruptcy Court under Chapter 11 of the U.S. Bankruptcy Code. Like many struggling parts suppliers, Cadence cited the faltering economy and the increased cost of fuel as issues severely impacting the business. The declining OEM production volumes and significant changes in vehicle segment mix in the U.S. have reduced Cadence Innovation's revenues during a period of rapidly increasing materials costs. This combination of sky-rocketing material costs and quickly deteriorating revenue precipitated the filing, said the company.

TROY, Mich. — Cadence Innovation has filed voluntary petitions for reorganization in a Delaware Federal Bankruptcy Court under Chapter 11 of the U.S. Bankruptcy Code.

Like many struggling parts suppliers, Cadence cited the faltering economy and the increased cost of fuel as issues severely impacting the business. The declining OEM production volumes and significant changes in vehicle segment mix in the U.S. have reduced Cadence Innovation’s revenues during a period of rapidly increasing materials costs. This combination of sky-rocketing material costs and quickly deteriorating revenue precipitated the filing, said the company.

The U.S.-based operations consist of six active manufacturing plants plus various support facilities, all located in Michigan and Indiana. The company’s European operations are excluded from this restructuring.

"The cause and effect in this situation is obvious and the cause is a clear set of external factors — collapsing revenue and material costs increasing at double-digit rates. The Cadence team has managed the internal issues exceptionally, and in most cases, we were prepared in advance of the next OEM plant shutdown or price increase from our supply base. We find the need to file for bankruptcy protection as a dreadful development, particularly given the commendable efforts of our workforce and the many sacrifices the Cadence Innovation team has made. The reality is that this groundswell of external factors and environmental change exceeds the flexibility of our business model,” said Jerry Mosingo, president and chief executive officer of Cadence Innovation.

During the process, Cadence Innovation expects to maintain current staffing levels at its plants and support facilities and will fund ongoing operations from debtor-in-possession financing that is being used to supplement its working capital.

This is a planned and voluntary Chapter 11 filing and as such, the company said it does not expect any disruption to the flow of product to our customer base. "From day one, we have always prioritized the welfare of our employees and the quality and delivery needs of our customers. We will continue to manage the company in that fashion," said Mosingo.

For more information about Cadence Innovation, visit: http://www.cadenceinnovation.com.