PPI Holdings Files First Day Motions and Applications

PPI Holdings, Inc., an automotive industry supplier that filed for bankruptcy earlier today in Delaware, has filed a variety of motions and applications for authority to continue operating their businesses.  These motions cover such topics as paying employees and certain “critical” vendors and obtaining post-petition financing.  Below is a list of the motions and applications filed today by PPI (click on the title to view the actual documents):

• Motion for Joint Administration
• Motion for the Entry of an Order Granting the Debtors Additional Time Within Which to File Their Schedules and Statements of Financial Affairs
• Motion for (A) Authority to Continue Use of Existing Cash Management System, Bank Accounts and Business Forms; (B) Granting Postpetition Intercompany Claims Administrative Status; and (C) Authority to Continue Intercompany Arrangements and Historical Practices
• Application for Entry of an Order Authorizing the Employment and Retention of Kurtzman Carson Consultants LLC as Their Claim, Noticing and Balloting Agent
• Motion for Entry of Interim and Final Orders (A) Prohibiting Utility Providers from Discontinuing, Altering, or Refusing Service, (B) Deeming Utility Providers Adequately Assured of Future Payment, and (C) Approving Procedures for Determining Requests for Additional Assurance
• Motion for the Entry of an Order Authorizing Debtors to Pay Prepetition Premiums Necessary to Maintain Insurance Coverage
• Motion for Entry of an Order (A) Authorizing, but Not Directing, the Debtors to Pay Certain Prepetition (I) Wages, Salaries and Other Compensation, (II) Employment Medical and Similar Benefits, and (III) Reimbursable Employee Expenses; (B) to Make Deductions from Employees’ Paychecks; and (C) Authorizing and Directing Banks and Other Financial Institutions to Pay All Checks and Electronic Payment Requests Made by the Debtors Relating to the Foregoing
• Motion for Authority to Pay Prepetition Claims of Shipppers, Brokers, Warehousemen and Other Lien Claimants and for Related Relief
• Motion for the Entry of an Order Authorizing the Debtors to Honor Certain Prepetition Obligations to Customer and to Otherwise Continue in the Ordinary Course of Business Their Customer Programs and Practices
• Motion for an Order Authorizing Them to Pay Prepetition Claims of a Foreign Vendor
• Motion for an Order Authorizing Them to Pay the Prepetition Claims of Certain Critical Vendors and Granting Certain Related Relief
• Motion for Interim and Final Orders (I) Authorizing the Debtors to Obtain Post-Petition Financing, (II) Authorizing the Debtors’ Limited Use of Cash Collateral, (III) Granting Adequate Protection to Prepetition Lenders

A hearing is scheduled on the motions for December 15, 2008 at 1:30 p.m.

PPI Holdings Files for Bankruptcy in Delaware

PPI Holdings, Inc., a supplier to the automotive industry, and certain of its affiliates filed voluntary chapter 11 bankruptcy petitions today in the United States Bankruptcy Court for the District of Delaware.  The company describes its business as being “leading designers and manufacturers in the area of fineblanking, a high-precision manufacturing process that combines principles of metal stamping and cold-forming, as well in the area of traditional, high-precision metal stamping for a diverse customer base in a variety of end markets, including automotive (on a Tier 1, Tier 2 and Tier 3 basis), construction, agricultural and lawn and garden.”  The company reports that no customer accounts for more than 30% of its revenues and that 38% of its revenues are derived from sales to automotive OEMs and 45% of its revenues are derived from sales to Tier 1 and Tier 2 automotive suppliers.

The company, headquartered in Rochester Hills, Michigan, operates six manufacturing facilities in North America (including one in Mexico).  In his declaration in support of the bankruptcy filing, PPI Holdings’ CFO reported that the bankruptcy filing was necessitated by, among other factors, declining revenues as a result of declining automotive sales combined with increasing costs of inputs.  As a result, PPI was unable to meet its financial obligations resulting from its highly-leveraged capital structure.