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Company Background and Organization
12 Months Ended
Mar. 31, 2013
Company Background and Organization [Abstract]  
Company Background and Organization
1. Company Background and Organization

Overview

Motorcar Parts of America, Inc. and its subsidiaries (the "Company", "Consolidated Companies" or "MPA") is a leading manufacturer, remanufacturer, and distributor of aftermarket automobile parts. These replacement parts are sold for use on vehicles after initial vehicle purchase. These automotive parts are sold to automotive retail chain stores and warehouse distributors throughout North America and to major automobile manufacturers.

The Company obtains used automobile parts, commonly known as Used Cores, primarily from its customers under the Company's core exchange program. It also purchases Used Cores from vendors (core brokers). The customers grant credit to the consumer when the used part is returned to them, and the Company in turn provides a credit to the customers upon return to the Company. These Used Cores are an essential material needed for the remanufacturing operations.

The Company has remanufacturing, warehousing and shipping/receiving operations for automobile parts in North America and Asia. In addition, the Company utilizes various third party warehouse distribution centers in North America.

Basis of Presentation and Going Concern

On May 6, 2011, the Company purchased (i) all of the outstanding equity of Fenwick Automotive Products Limited ("FAPL"), (ii) all of the outstanding equity of Introcan, Inc., a Delaware corporation ("Introcan"), and (iii) 1% of the outstanding equity of Fapco S.A. de C.V., a Mexican variable capital company ("Fapco") (collectively, "Fenco"). Since FAPL owned 99% of Fapco prior to these acquisitions, the Company now owns 100% of Fapco.

The accompanying consolidated financial statements have been prepared assuming that Motorcar Parts of America, Inc. and subsidiaries will continue as a going concern. The Company's wholly owned subsidiary Fenwick Automotive Products Limited ("Fenco") has incurred operating losses of $135,260,000 and $62,814,000 and negative cash flows from operations of $26,092,000 and $53,952,000 for the years ended March 31, 2013 and 2012, respectively.  Fenco has a working capital deficiency and an accumulated deficit of approximately $99,818,000 and $198,074,000 at March 31, 2013, respectively. In addition, under the Fenco Credit Agreement, the Company has an outstanding term loan and revolving debt of $10,000,000 and $49,277,000 at March 31, 2013, respectively. The Fenco Credit Agreement, among other things, requires Fenco to maintain a minimum EBITDA of not less than $6,100,000 for the period from September 1, 2012 to March 31, 2013. As of March 31, 2013, Fenco was not in compliance with this financial covenant under the Fenco Credit Agreement.

During May 2013, Fenco appointed a new board of independent directors, hired an independent chief restructuring officer and all its previously existing officers resigned from FAPL. As a result of the loss of control of Fenco, the Company will likely deconsolidate the financial statements of Fenco from its consolidated financial statements during the first quarter of fiscal 2014.  On June 10, 2013, each of Fenco, Introcan and Introcan's subsidiaries, Flo-Pro inc., LH Distribution Inc., Rafko Logistics Inc., Rafko Holdings Inc. and Rafko Enterprises Inc. filed a voluntary petition for relief under Chapter 7 of Title 11 of the United States Code (the "Bankruptcy Code") in the U.S. Bankruptcy Court for the District of Delaware. As of March 31, 2013, Fenco's financial statements are included in the consolidated financial statements of the Company.

These conditions relating to Fenco coupled with the significance of Fenco to the Consolidated Companies raise substantial doubt about the Consolidated Companies' ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.