Northstar Aerospace Seeks Creditor Protection
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Helicopter equipment and repair company Northstar Aerospace Inc. is filing for creditor protection in both Canada and the United States while it arranges the sale of its business for more than US$70 million, the Winnipeg Free Press reported. The troubled Chicago-area concern said Thursday that its U.S. subsidiaries, Northstar Aerospace (USA) Inc., Northstar Aerospace (Chicago) Inc., Derlan USA Inc. and D-Velco Manufacturing of Arizona Inc. have filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Meanwhile, Northstar Aerospace (Canada) Inc. and certain of its Canadian subsidiaries have applied to the Ontario Superior Court of Justice for protection under the Companies' Creditors Arrangement Act. Heligear Acquisition Co. and Heligear Canada Acquisition Corp., affiliates of U.S.-based private equity firm Wynnchurch Capital Ltd., have made a US$70-million stalking horse bid for the company. The proposed deal also includes the assumption of certain unspecified liabilities. Northstar said the offer will be subject to a competitive bidding procedure under which "higher and better offers may be obtained." However, if no superior offers are received "there would be insufficient proceeds to (completely) repay Northstar's secured creditors and consequently no proceeds to pay any of the corporation's unsecured creditors or shareholders," it added. Northstar said the corporation's board of directors had decided to resign concurrently with the filing for a 30-day initial order under CCAA. Northstar said existing secured lenders have agreed to provide additional debtor-in-possession financing of up to US$4 million during the proceedings and that it has also obtained US$7 million in additional DIP financing from Boeing Capital Loan Corp. Northstar Aerospace is an independent manufacturer whose principal products include helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Read more.