Blackhawk gets OK for auction

Bidders must agree to keep the company operating.

DOW JONES NEWSWIRES

YOUNGSTOWN — A bankruptcy judge has given auto-parts maker Blackhawk Automotive Plastics Inc. permission to put its business on the auction block.

Judge Kay Woods of the U.S. Bankruptcy Court in Youngstown indicated she’d approve the bidding rules for the auction at a Tuesday hearing.

Woods also granted final approval of Blackhawk’s bankruptcy financing pact, which rolls up some $36 million owed to its lenders into a debtor-in-possession loan.

The auto supplier’s bank lenders and two of its biggest customers — General Motors Corp. and International Automotive Components Group North America Inc. — are financing Blackhawk’s bankruptcy case.

The lenders required Blackhawk to solicit bids for the company’s business as a going concern.

Bids for all or a portion of Blackhawk’s assets are due Feb. 29, and the sale or sales must be ready to close by March 14, under the timeline submitted to the bankruptcy court.

The Salem, Ohio-based maker of plastic automobile parts is putting itself up for sale despite not having lined up a lead, or stalking horse, bidder for its assets. Companies in Chapter 11 intending to sell their assets typically designate a stalking horse bidder to set a floor price for the auction.

Blackhawk makes specialty molded plastics for a number of automotive companies, including GM, Ford Motor Co. and Honda Motor Co . It also makes parts for other suppliers like Delphi Corp., Lear Corp. and Visteon.

The company employs more than 1,500 people in Salem and Michigan and raked in $136 million in sales last year.

Blackhawk Automotive Plastics, a subsidiary of holding company Tier e Automotive Group, filed for Chapter 11 protection on Oct. 22, after being squeezed by vendors who cut off the company’s trade credit.

The auto supplier listed $58.66 million in assets and $51.24 million in debts in its Chapter 11 filing.