KENTWOOD – A Grand Rapids-area manufacturing group that has made significant investments in the casino slots industry has filed for bankruptcy after racking up more than $10 million in debt.
TG Manufacturing LLC On February 21, he filed for Chapter 11 bankruptcy in the US Bankruptcy Court in the Western District of Michigan. Headquartered at 4720 44th St. SE in Kentwood, the company includes West Michigan-based subsidiaries AIM Tool & Die, AIM Industries, Craft Steel and Dorr Industries. TG Manufacturing also owns Tupelo Tool & Die in Tupelo, Miss.
WITH KIND PHOTO
Affiliates TGM Coatings LLC and TG Turnkey LLC also filed for Chapter 11 bankruptcy on Feb. 21, while TG Integration LLC — hoping to obtain solvency — filed March 27.
Owned by Richard Achtenberg with a total of 36 employees, the four companies are represented by the Grand Rapids-based bankruptcy and commercial litigation law firm Keller & Almassian PLC. A bankruptcy judge this week approved a motion for joint administration of the cases.
According to an affidavit and President Kevin Kyle’s affidavit, TG Manufacturing is seeking to sell all of its businesses as a going concern and has held discussions with several interested parties.
TG Manufacturing has closed its doors while TGM Coatings, TG Turnkey and TG Integration remain operational, according to court documents.
Attempts to reach TG Manufacturing were unsuccessful, and Todd Almassian, a partner at Keller & Almassian, declined to comment on the story.
TG Manufacturing specializes in manufacturing material handling and automotive components. Court documents showed the company had annual sales of up to $20 million at its peak.
According to Kyle’s affidavit filed with the court, the company lost a contract with a “major customer” in 2020, resulting in a sharp drop in sales. When the COVID-19 pandemic swept across the United States in March 2020, the automotive industry was hit particularly hard as vehicle production and the underlying supply chain encountered widespread disruption.
TG Manufacturing then branched out into a growing segment of its business with the production of casino gaming and amusement machines, according to the affidavit.
In June 2020, to position itself in the market, TG Manufacturing acquired the gaming machine integration division of Grand Rapids-based Turnkey Fabrication LLC, which operated a 20,000 square foot facility in Grand Rapids and served gaming companies across North America. how MiBiz previously reported. This department was then organized under the banner of TG Integration.
”Slots manufacturing is an exciting sector with tremendous growth potential globally, and we are excited to be able to offer some of the most vertically integrated products in the industry,” said Achtenberg when announcing the transaction last summer.
The company began its vertical integration strategy in the casino gaming sector the year before when it acquired Grand Rapids-based A2Z Powder Coating, which served as a supplier to the automotive, material handling and gaming industries. The three related companies – TGM Coatings, TG Turnkey and TG Integration – worked together to vertically integrate the process of manufacturing gaming machines.
Similar to the momentum in the auto industry, the COVID-19 pandemic also rocked the casino industry as brick-and-mortar casinos were temporarily closed due to public health measures.
Before the downturn, TG Manufacturing, TGM Coatings and TG Turnkey were trying to shore up their finances, using Bank of America on a $5 million line of credit and a $2 million term loan in 2019, according to court documents emerges. This financing was secured by the assets of all three entities and was also personally guaranteed by Achtenberg.
The companies defaulted on the loan, and in January of this year, Bank of America filed a lawsuit in state court seeking a court-appointed receiver. According to court documents, the three companies owe approximately $6.2 million to Bank of America at the time of filing.
To compound its financial woes, TG Manufacturing has also been named in several civil lawsuits in the Kent County District Court for unpaid bills, resulting in sizeable judgments against the company. Over the past year, the company has had to deal with nearly a dozen civil lawsuits in district courts.
TG Manufacturing has received multiple judgments in favor of the company’s suppliers, including $1.5 million for Benteler Automotive Corp., $561,029 for Chicago-based steelmaker Lafayette Steel and Aluminum, and $96,563 for Birmingham-based Alabama-based industrial supply company GBA Supply Inc. All are classified as unsecured receivables in the filing by TG Manufacturing.
Below is a snapshot of each entity’s financial position:
- Net worth: $1.6 million
- Liabilities: $10.2 million ($6.2 million secured; $4 million unsecured)
- Secured creditors: Bank of America ($6.2 million)
- Top unsecured debts (local creditors): Spectrum E-Coat of Grand Rapids ($49,944.13); Grand Haven Township ($47,294.30); Greenville-based FabX Industries ($46,505.92); Grand Rapids-based United Fastener and Supply Co. ($36,770.72)
- Net Worth: $999,057
- Liabilities: $7,863,501.89 ($6.2 million secured; $1.6 million unsecured)
- Secured Creditors: Bank of America ($6.2 million); Michigan Department of Treasury ($15,214.81)
- Top Unsecured Debt (Local Creditors): LaserTec Sheet Metal Fab of Greenville ($96,433.87); Machine Star of Grand Rapids ($32,098.14) and Advance Plating and Finishing ($27,756.50); Wyoming Purity Bottled Gases ($28,181.12)
- Net worth: $249,439.00
- Liabilities: $6.2 million ($6.2 million secured; $33,268.01 unsecured)
- Secured creditors: Bank of America ($6.2 million)
- Highest unsecured debts (local creditors): J&L Roofing of Grand Rapids ($800); Arrowaste from Jenison ($769.03); Purity Bottled Gases ($667.82)
- Net worth: $538,067.00
- Liabilities: $123,290.80 (all unsecured)
- Top Unsecured Debt (Local Creditors): Arrowaste ($2,207.25); Pre-Coating and Finishing ($1,588.54)
While TG Integration initially attempted to avoid a Chapter 11 filing, “developments since the initial cases were filed have determined that Integration would also need to file a Chapter 11 case,” which took place on March 27, according to Kyles affidavit.
The affidavit also said the three outstanding entities “immediately require the use of cash collateral” in order to continue business operations. If they are not granted this right, according to the affidavit, the company would suffer “irreparable damage” that could jeopardize its corporate value.