CEO of Plastech Could Benefit in Sale

The founder of Plastech Engineered Products Inc. could be paid more than $9 million when her company is sold. As the 20-year-old supplier liquidates, bankruptcy lawyers for Plastech have asked U.S. Bankruptcy Judge Phillip Shefferly to approve several settlements, including a deal that would give Plastech CEO and majority owner Julie Brown $9.25 million.

From Detroit Free Press

Bankruptcy judge to consider deal worth $9.25 million

DETROIT — The founder of Plastech Engineered Products Inc. could be paid more than $9 million when her company is sold.

As the 20-year-old supplier liquidates, bankruptcy lawyers for Plastech have asked U.S. Bankruptcy Judge Phillip Shefferly to approve several settlements, including a deal that would give Plastech CEO and majority owner Julie Brown $9.25 million.

The money would be tied to the sale of Plastech’s interiors business, which accounts for the bulk of the company’s sales. A joint venture formed by Johnson Controls Inc. and a group of Plastech’s lenders is working to buy the unit.

The deal also allows Brown to keep a separate $2 million settlement of a lawsuit filed against a company she invested in two years ago.

Shefferly is to take up the settlement at a hearing Thursday.

Last week, Shefferly approved the sale to Johnson Controls, as well as the sale of most of Plastech’s assets to other buyers.

In another joint venture with Plastech’s lenders, Magna International Inc.’s Decoma unit is to buy the machinery and customer contracts at Plastech’s exteriors business.

In both deals, lenders are trading the debt that Plastech owes them in exchange for Plastech’s assets.

The deal with Magna includes the closure of at least four plants: one in Romulus and three in Ohio. The UAW and Plastech reached an agreement that would give workers severance pay of one to two weeks, depending on their seniority. They would also be paid for unused vacation time and receive health and life insurance benefits through July.

Shefferly is to consider approving that union agreement Thursday.

Also on Thursday, Shefferly will take up a plan that would set aside $14 million for unsecured creditors.

Plastech filed for bankruptcy protection in February. Already struggling financially under the weight of rising oil prices and falling production at its largest customers, the company filed for Chapter 11 after Chrysler LLC threatened to cancel its contracts and take machinery from Plastech.