Trucking companies, logistics firms and suppliers may be left in a lurch after an Illinois auto parts supplier folded and filed Chapter 7 in early October.
JD Norman Industries, headquartered in Addison, Illinois, filed its bankruptcy petition in the U.S. Bankruptcy Court for the Western District of Michigan on Oct. 5, seven months after it says it lost its biggest customer — General Motors.
Prior to filing Chapter 7, the company, which was founded in 2004, filed a federal Worker Adjustment and Retraining Notification (WARN) Act notice in March that it was permanently closing its entire Leslie, Michigan, plant operation after the “unexpected loss” of GM.
JD Norman, a former major OEM and tier-one supplier of automotive powertrain and components, manufactured the connecting rods for GM’s Duramax diesel engines.
Chapter 7 bankruptcy
In March, the company said it was informed by its customer “that it was no longer willing, as part of the agreement, to commit to funding payroll and benefits for the Leslie employees long enough for [JD Norman] to provide the 60 day advance updated notice described above, which it planned to do as soon as the agreement was finalized,” according to its WARN notice.
A month prior to issuing the WARN notice, JD Norman terminated 65 workers in Canada without notice on Feb. 5.
According to CBC News, former JD Norman employees set up a blockade to protest the abrupt layoffs and closure outside the company’s plant in Windsor, Ontario. The blockade was eventually taken down after a settlement was reached with the company, according to the news outlet.
Workers at the Windsor plant later found out JD Norman had been placed in receivership on Feb. 12 by Toronto-based Callidus Capital Corp., which claims it was owed more than $146 million after providing bridge loan financing to the auto parts company to help it stay afloat.
Since 2019, company reported an 86% decline in gross revenues after raking in over $132 million in 2019, then posted a steep decline in revenue for the following two years — $85.5 million in 2020 and $18.4 million for the first 10 months of 2021.
In its filing, JD Norman states that it has no assets and lists its liabilities as between $100 million and $500 million.
The company states that it has up to 5,000 creditors. After administrative fees are paid, no funds will be available for unsecured creditors of JD Norman and its subsidiaries, according to Max Rogers, CEO of JD Norman.
JD Norman is battling numerous legal actions, including 12 breach-of-contract lawsuits, in the U.S.
Top logistics, trucking creditors
Among JD Norman’s top 20 unsecured creditors among logistics firms and brokerages in the U.S. — creditors that are last in line for payment in Chapter 7 cases — are Automated Logistics System of Jackson, Mississippi, owed $117,000; ACF Global Logistics, also of Jackson, owed $33,310; ProTrans International of Indianapolis, owed nearly $27,500; and C.H. Robinson Worldwide of Eden Prairie, Minnesota, owed more than $23,500.
U.S. trucking companies are also listed as unsecured creditors in JD Norman’s bankruptcy petition. They include ArcBest of Fort Smith, Arkansas, owed more than $13,000; Estes Express Lines and Estes Forwarding Worldwide, both of Richmond, Virginia, owed a combined $8,500; and Central Transport of Detroit, owed nearly $2,200.
An auction site started selling off the company’s production line equipment in the U.S. in July.
Maynards handled the auction of JD Norman’s facility in Horselberg, Germany, that supplied assembled components to automotive companies that included Mercedes-Benz, Audi, Ford, VW, Fiat and Kia.
A creditors meeting is scheduled for Nov. 12.
Click for more articles by Clarissa Hawes.
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