The man expected to be named CEO of Venture Holdings Co. L.L.C. was a key reason the auto supplier's bondholders agreed to a pre-packaged Chapter 11 petition that the two sides are putting together after months of talks.
Joseph Day, the former Freudenberg-NOK G.P. CEO, gives Venture credibility and a record of lean manufacturing and profits. Both were critical in getting the bondholders to accept equity in the company in lieu of debt payments, say analysts and those close to the situation.
Day was expected late last week to be named Venture CEO, and the company reportedly had prepared a Chapter 11 petition. Day retired from Freudenberg-NOK in October.
"I imagine that the only way they would support this is with somebody they feel more secure with," said James McTevia, president of McTevia & Associates Inc., an Eastpointe-based turnaround firm. "This is a guy with a proven track record and a guy who knows the industry."
Under the proposed Chapter 11 plan, bondholders would own a piece of a restructured Venture, which manufactures plastic components, said two sources familiar with the company. Founder Larry Winget would remain the majority equity-holder.
Day has a history of running a profitable, privately held company. Bondholders who are turning down an immediate liquidation payment of pennies on the dollar need to see profits quickly, McTevia said.
The bondholders, who hold three issues totaling $455 million, wanted some new blood in management, said a source familiar with the situation.
"The bondholders said they'd go along with this, but there's no way they'd continue to be at Larry's mercy," said the source, who didn't want to be identified. "Joe Day is the new face. He's here to fix things. He's the new sheriff."
Venture's public-relations firm, New York City-based Robert Mars-ton And Associates Inc., canceled a scheduled interview between Day and Crain's late Friday.
Winget was the subject of a recent Forbes article that chronicled his ownership of outside companies that had contracts with Venture.
Venture's problems began last May when four directors of its German subsidiary, Peguform GmbH, asked a German court to declare Peguform insolvent. Venture paid $475 million for Peguform in 1999, and it accounted for about 40 percent of the company's $1.9 billion in 2001 sales.