Iconic Auto Parts Brand Files for Chapter 11 Bankruptcy: What It Means for Consumers
The automobile industry has faced significant financial challenges over the past year, with multiple companies filing for bankruptcy.
Major Bankruptcies in the Auto Industry
The most notable bankruptcy occurred on June 18 when Fisker Group, an electric vehicle manufacturer, filed for Chapter 11 protection, opting to cease operations and liquidate its assets.
Several auto parts companies have also encountered financial distress. PartsID, an e-commerce auto parts retailer, filed for Chapter 11 in December 2023. The company operates several websites, including TruckID.com, CardID.com, and CamperID.com, to sell auto parts directly to consumers.
On September 9, Wheel Pros, known for its auto parts distribution and retail brand Hoonigan, filed for prepackaged Chapter 11 bankruptcy. This move aims to eliminate $1.2 billion in debt and secure approximately $570 million in new capital through an exit facility. Under the restructuring support agreement filed in the U.S. Bankruptcy Court for the District of Delaware, Wheel Pros has reached a consensual restructuring plan with its equity sponsor, Clearlake Capital Group, and its lenders. The agreement will allocate 85% of the new equity interests to first lien claim holders and 15% to new first-lien lenders backing the debtor’s exit term loan.
Accuride’s Bankruptcy Filing
Accuride Corp, a prominent manufacturer of wheels and wheel end products for commercial trucks and trailers, filed for Chapter 11 bankruptcy protection on October 9, seeking to restructure its debt while continuing operations. Accuride, known for brands like Accuride, Gunite, and KIC, is a leading manufacturer in its field, producing around 20 million wheels annually and holding a 40% share of the North American steel and aluminum wheel market for commercial vehicles.
The company supplies its products to original equipment manufacturers of trucks and trailers as well as aftermarket distributors. In its bankruptcy petition, Accuride listed assets and liabilities between $500 million and $1 billion, including $22.7 million owed to its largest unsecured creditor, Matalco Inc.
Accuride’s financial troubles have been exacerbated by sanctions against the Russian Federation due to its invasion of Ukraine, which hindered the company from accessing cash from its non-debtor Russian affiliate, which was not facing financial difficulties. Despite attempts to improve its financial situation through operational initiatives, Accuride’s prepetition efforts fell short.
In June 2024, the company began discussions with an ad hoc committee of its first lien term loan lenders regarding potential investment or asset purchases. Ultimately, it opted for a post-petition transaction with the ad hoc group as part of a Chapter 11 reorganization plan. The debtor has also secured $103 million in debtor-in-possession financing, which includes $30 million in new funds while rolling up $73 million in existing debt.
Company History
Accuride was founded in 1986 as a carve-out acquisition from Firestone Tire & Rubber Co., tracing its lineage back nearly 150 years to Gunite, established in 1854 as a manufacturer of bicycle, wagon, and buggy tires. In 2005, Accuride merged with Transportation Technologies Industries Inc., becoming one of the largest suppliers of truck components for the heavy- and medium-duty trucking industry and further solidifying its position in the market.
