HIG ousts Versa in Shapes/Arch reorg

Miami buyout firm H.I.G. Capital has muscled aside rival Versa Capital Management Inc. of Philadelphia in bankruptcy court maneuvers to win control of Shapes/Arch Holdings LLC, one of South Jersey’s largest employers.

Shapes' 1,000 workers in Pennsauken and Bensalem make aluminum and plastic parts for truck-makers and home-builders. Sales dropped last year Shapes said in its March Chapter 11 filing.

HIG agreed to lend up to $30 million to Shapes, and to hold an auction that will let other bidders make sweeter offers, under an order signed Tuesday by federal bankruptcy court judge Gloria M. Burns in Camden. If that happens, HIG collects a $1 million break-up fee. At least one other potential owner, Sun Capital Partners of Boca Raton, has also expressed interest.

Versa had offered to lend up to $25 million, under a March proposal supported by Shapes chief executive Steve Grabell and other company officials and owners.

Creditors objected to the Versa plan and backed HIG’s offer because Versa proposed spending just $500,000 to pay an estimated $30 million plus in Shapes debts to suppliers, contractors and other creditors, while HIG agreed to set aside $5 million, said lawyer Alan Halperin of Halperin Battaglia Raicht LLP, New York, which is representing Shapes creditors.

UPDATE 5/12: Versa later upped its creditor offer to $2 million, says spokeswoman Kristy Lash.