Daily News: June 15, 2012

Northstar Announces Chapter 11, CCAA Filings

Northstar Aerospace, Inc. announced that, after full consideration of all its available alternatives, its U.S. subsidiaries, Northstar Aerospace (USA) Inc., Northstar Aerospace (Chicago) Inc., Derlan USA Inc. and D-Velco Manufacturing of Arizona, Inc. have filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware.

The corporation, Northstar Aerospace (Canada) Inc. and certain of its Canadian subsidiaries are applying for an Initial Order from the Ontario Superior Court of Justice (Commercial Division) under the Companies’ Creditors Arrangement Act (CCAA).

The main purpose of the filings is to effectuate a going-concern sale of the business. In its filing, the company listed $50,000 in assets and approximately $100 million in debt.

The corporation will be requesting CCAA protection for an initial period of 30 days, expiring on July 14, 2012. While under CCAA and Chapter 11 protection, creditors and others are stayed from pursuing any claims or enforcing any rights against the filing entities. The corporation’s Board of Directors have elected to resign their positions concurrently with the CCAA filing. The corporation is seeking the appointment of FTI Consulting Canada, Inc., as chief restructuring officer under the Initial Order. The corporation also is proposing that Ernst & Young Inc. be appointed as monitor in the CCAA proceeding.

It is intended that Northstar’s operations will continue uninterrupted during the CCAA and Chapter 11 proceedings and obligations to employees and suppliers of goods and services provided after the filing date will continue to be met.

Northstar’s existing secured lenders have agreed to provide additional debtor-in-possession (DIP) financing of up to U.S. $4 million during the CCAA and Chapter 11 proceedings, subject to customary terms and conditions. Northstar has also obtained additional DIP financing of up to U.S. $7 million from Boeing Capital Loan Corporation.

The corporation has entered into an asset purchase agreement, subject to approval of the Courts (the APA) with Heligear Acquisition Co. and Heligear Canada Acquisition Corporation, affiliates of Wynnchurch Capital, Ltd., pursuant to which substantially all of the assets of Northstar will be sold for an aggregate purchase price of approximately U.S. $70 million, together with the assumption of certain liabilities.

Harris Williams & Co. acted as financial advisor to Northstar in connection with the selection of the stalking-horse bidder and is being proposed to continue to serve as financial advisor through the CCAA and Chapter 11 proceedings.

Northstar Aerospace, Inc. is an independent manufacturer of flight critical gears and transmissions.