Judge Okays Dana’s Chap. 11 Plan

After 21 months in bankruptcy, the way is clear for a January emergence for the auto parts company, which predicts a return to successful global co...
Stephen TaubDecember 27, 2007

Dana Corp. said a Federal bankruptcy judge signed an order confirming the company’s Reorganization plan, paving the way for the auto parts maker to emerge from Chapter 11 next month.

In November, the company closed a $2 billion exit financing facility and satisfied other customary closing conditions. Dana entered Chapter 11 in March 2006.

Approval by the judge “is a significant milestone for Dana and all of its constituents,” Dana chairman and CEO Mike Burns said. “The approved plan provides a solid foundation for the new Dana. We now look forward to emerging as a focused, solvent company that is positioned to take advantage of its considerable strengths and compete successfully in its global markets.”

During its 21 months in bankruptcy, the company has won court approval for between $440 million and $475 million in annual cost savings and revenue improvement. Under the reorganization plan, a group of investors led by Centerbridge Capital Partners would make a $790 million equity investment. Centerbridge’s funds would consist of $250 million for preferred stock in the reorganized company and up to $540 million of preferred stock not bought by qualified creditors or an investor group, according to an earlier Reuters report.

Dana’s reorganization also has involved the sale of several businesses, renegotiation of labor contracts with its hourly workers, and agreements with its customers.