10 February 2012 16:01 [Source: ICIS news]
TORONTO (ICIS)--One of Canada’s largest polyurethane (PU) foam producers has filed for creditor protection as it seeks to sell its business to pay debts and claims arising from price-fixing lawsuits against it, according to court documents on Friday.
In an affidavit before a court in Toronto, Valle Foam president Tony Vallecoccia said that Valle and two affiliates require protection from creditors because of a Canadian dollars (C$) 12.5m ($12.5m) fine for price fixing, lawsuits for price fixing against them in ?xml:namespace>
Last month, Valle Foam and affiliate Domfoam were fined C$12.5m by Canadian competition authorities after pleading guilty to price-fixing in PU foam over a period of 11 years – from January 1999 to March 2010.
Vallecoccia said that Valle and the affiliates continue to operate but have “down-sized” by closing one location and suspending the manufacturing of underlay products.
Valle, based in Brampton, west of Toronto, is currently paying suppliers on a cash-on-delivery basis. However, given that it does not have enough cash to pay accrued debts owing to suppliers, the company fears that suppliers may soon cut off all deliveries, Vallecoccia said.
Bayer, Valle’s largest supplier of polyols, and other suppliers have already contacted Valle to inquire about the status of their outstanding accounts, he added.
Also, several customers have indicated that they may be seeking new suppliers for PU foam given Valle’s situation, Vallecoccia said.
Meanwhile, Valle and the affiliates have launched a court-supervised process to sell their assets to meet financial claims against them, he said. The most likely buyers would be Valle’s competitors in the PU foam industry, he added.
Valle Foam, Domfoam and A-Z are collectively one of the largest manufacturers and distributors of PU foam products in
($1 = C$1)
Additional reporting by Al Greenwood in
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