Pace Industries parent’s investor eyes dismissal of Chapter 11 cases

By Caroline Salls

Pittsburgh, April 17 – An investor in Pace Industries, LLC’s parent company asked the U.S. Bankruptcy Court for the District of Delaware to dismiss Pace’s Chapter 11 case, according to a motion filed Friday.

Macquarie Septa (US) I, LLC said it and affiliate Macquarie Sierra Investment Holdings Inc. entered into an investment and subscription agreement in 2018 with Pace parent KPI Intermediate Holdings, Inc. and KPI Holdings, LLC under which the Macquarie entities purchased 250 shares and 150 shares, respectively, of series A preferred stock issued by KPI Intermediate for $37.15 million.

To induce it to pay that amount for the preferred stock, Macquarie said KPI Intermediate filed an amended certificate of incorporation with the Delaware Secretary of State to include protections for the holders of series A preferred stock.

“On April 12, 2020, the directors caused the KPI Intermediate debtors to file unauthorized voluntary bankruptcy petitions,” the dismissal motion said.

“None of the petitions include any written consent or affirmative vote of Macquarie Septa, the holder of 62.5% of the series A preferred stock because neither its written consent nor affirmative vote was obtained. Macquarie Septa did not consent to the filing of the petitions.”

According to the dismissal motion, the Pace debtors’ directors had no power to authorize the bankruptcy filing.

A hearing is scheduled for May 5.

Pace is a Fayetteville, Ark.-based full-service aluminum, zinc and magnesium die casting company. The company filed bankruptcy on April 12 under Chapter 11 case number 20-10927.

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