Southfield, Mich.-based automotive supplier Wrena LLC filed for bankruptcy Monday with the intention of selling the business after being ordered to pay $30 million in a lawsuit over defective parts.

The company petitioned for voluntary Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Michigan with liabilities between $10 million and $50 million, and just over $2 million in machinery and equipment assets, according to the filing.

Wrena and its parent company, Angstrom Automotive Group LLC, were hit with a $30 million jury verdict in Ohio a few months ago in a case won by power electronics giant Eaton Corp. The jury ruled against Angstrom and Wrena on four counts, awarding damages for parts defects tied to clutch failures.

That verdict, along with “rising costs” and “other market pressures” led to the company seeking bankruptcy and a court-approved sale process, according to a news release from Wolfson Bolton Kochis PLLC, which is representing Wrena in its bankruptcy. Scott Eisenberg is listed as the chief restructuring officer on the case.

Wrena appealed the decision in Ohio’s Sixth Circuit Court of Appeals but has been unsuccessful obtaining a stay pending the appeal, thus prompting the bankruptcy filing, Eisenberg said in the release.

“This process will allow us to continue operations, preserve jobs, and position the company for future success under new ownership,” Eisenberg said.

It is not clear if a potential buyer has been identified for the supplier, which manufactures stamped tubular components, assemblies and blanks in a tier one and tier two capacity. Customers include Driv Automotive Inc., Tesla Inc., BWI Group, Skyway Precision Inc. and Hanwha Advanced Materials.

In the Wrena bankruptcy, there are 67 unsecured trade debt creditors owned approximately $1.2 million. Besides Eaton in its $30 million verdict, the largest unsecured creditors include Detroit-based Target Steel Inc. ($117,866); Detroit-based The Mill Steel Co. ($436,304) and Rochester, Mich.-based Miller Law Firm ($560,076).

The company is seeking court approval to use cash collateral and debtor-in-possession financing to maintain operations. That approval will allow the company to “stave off an imminent liquidation, the loss of approximately 50 jobs, and the resulting just-in-time supply consequences to its customers if debtor ceases operations,” according to the bankruptcy cover sheet.

Crain’s Detroit Business inquired with Wolfson and Eisenberg for more information.

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