Customer says Northstar Aerospace breached obligations
Jan. 30, 2012, Chicago, Il. - Northstar Aerospace Inc. says one of its major customers has filed a notice claiming breach of its obligations under certain contracts.
By Carey Fredericks
The Canadian-American company says the notice demands that it cure the breach or resolve the claims within 10 days.
Northstar says it is evaluating the claims to determine an appropriate course of action and will review all alternatives to protect its position.
On Sept. 30, 2011, Northstar said "various uncertainties" had raised doubts about the company's ability to continue as a going concern.
It says it has been unsuccessful so far in trying to amend customer contracts and expects to be in violation of its financial covenants as of Jan. 31.
In the meantime, Northstar continues talks with its lenders to amend its credit agreement to ensure it can maintain its operations.
Northstar adds that "no assurances can be given that these matters will be satisfactorily resolved."
The company makes gears, transmissions and other parts.
It has U.S. plants in Chicago and Phoenix, Arizona and Canadian operations in Milton and Windsor, Ont.