Founded in 1975, the company “had a long history of profitability” that reversed as the result of a “disaster” deal with Nova Steel USA Inc., Steven Atwell, owner and president of Erin Industries, told Crain’s.
Now the company is hoping for debt relief and leverage to restructure unfavorable contracts by filing for Subchapter V of Chapter 11 bankruptcy protection — an option designed for smaller businesses that became available in 2020.
“We’re going to be able to work through this, and I think we’re going to survive. … I know we’re going to survive,” Atwell said. “Chapter 11 gives us some leverage to renew our contracts and try to get some of these (price) increases through.”
Erin Industries is the latest in a string of recent bankruptcies in Michigan, where financial woes are piling up on manufacturers and the weight of the pressure is falling on smaller companies. Machine shops and lower tier suppliers are increasingly turning to Subchapter V — a cheaper way to go bankrupt, as it were — to keep the lights on.
Atwell said most of his customers, which include major automakers and suppliers, offered price increases on steel, but not on other inputs, such as