Fenwick Automotive Products, which began in 1949 as a two-man clutch shop in downtown Toronto, has declared bankruptcy.
The company filed for protection after being split off from its parent company Torrance, Calif.-based Motorcar Parts of America, which purchased Fenwick for $5 million in stock in May 2011.
Motorcar Parts of America also split off Fenco’s U.S. operations, operating under the name Introcan.
Fenco made brake parts, axles and other undercar parts.
Motorcar Parts of America, a rebuilder of alternators and starters, struggled to make the Fenco business profitable. Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America, said the Fenco investment has been “written off” and the loss will be disclosed in the company’s fiscal 2013 year-end results.
"While Fenco had made progress in its transition plans for the undercar segment since the acquisition, the cost savings and operational efficiencies were not sufficient for Motorcar Parts to continue its involvement with Fenco under the current financial structure.”
Joffe emphasized that Motorcar Parts of America’s rotating electrical base business continues to be strong.
At the end, Fenco was being managed by a chief restructuring officer and a board not affiliated with Motorcar Parts of America.
Introcan Inc. a Torrance affiliate of Toronto-based Fenwick Automotive Products Ltd., filed for Chapter 7 bankruptcy late Monday in U.S. Bankruptcy Court in Wilmington, Del. Introcan listed assets of less than $10 million and debt of between $100 million to $500 million. In a separate filing, Fenwick listed debt of as much as $500 million, and assets of more than $10 million, according to Bloomberg News.
In Lock Haven, Penn., 147 workers were told they no longer have jobs at Fenco’s distribution and technical facilities.
Motorcar Parts shares on Tuesday closed up 77 cents, or 11 percent, to $7.46 on the Nasdaq.