Shapes/Arch, one of South Jersey's biggest employers, has filed for bankruptcy, and hopes to reorganize with help from Versa, a Philadelphia turnaround specialist.
Shapes/Arch Holdings LLC, a Pennsauken company that makes truck, construction and hardware parts, to file for reorganization under Chapter 11 of the federal bankruptcy code, citing the poor national economy and rising import costs.
Shapes/Arch employs more than 1,000 workers at plants in Delair and Bensalem, Pa. Chief executive officer Stephen Grabell said it's "business as usual" for workers and customers during the reorganization.
Shapes/Arch reported sales of $274 million last year, down from $322 million in 2006, wiping out most profits and leaving the company unable to stay current on its bills, according to one of its court filings.
The company's lending group, CIT Group, JPMorgan Chase & Co., and Textron Corp., have extended $60 million in credit. Shapes/Arch said it needs more to get through the downturn. Versa Capital Management Inc. has agreed to lend the company up to $25 million, in exchange for 80 percent voting control during the reorganization.
Versa, which invests in troubled companies, was formerly called Chrysalis Capital. It’s an affiliate of Independence Capital Partners, a Philadelphia investment group founded by Ira Lubert and his partners. Investors include Pennsylvania’s state workers’ and state teachers’ pension systems, SERS and PSERS.
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