Dura Automotive Systems Inc. said its reorganization plan was approved by Federal Bankruptcy Court, clearing the way for it to emerge from Chapter 11. The auto parts maker said that under the plan, debtor-in-possession claims, administrative expenses, and other priority claims will receive cash.
Holders of second lien debt will receive new convertible preferred stock. Senior notes and other general unsecured claims will receive 100 percent of new common stock. Meanwhile, the company’s pre-bankruptcy subordinated notes, convertible preferred securities, and existing equity will not receive anything in exchange for their claims. In all, the total claims came to $1.3 billion, according to the plan that was filed in March. About $230 million in loans, and $225 million in convertible preferred stock, were included in the exit plan.
“While there is still work to be completed in our revitalization strategy, we are already realizing favorable results from our operational restructuring initiatives and our financial results continue to exceed plan targets,” said Larry Denton, chairman and chief executive officer of Dura. “The global automotive industry continues to undergo a sweeping transformation, and [Dura] is now well positioned to participate in its growth. We now have a much stronger balance sheet, enabling the company to better compete as a global automotive supplier.”
Dura filed for bankruptcy protection in October 2006. Back in February, Dura officials revealed that creditor opposition to its Chapter 11 bankruptcy plan led it to hold back bonus payments for four top officers. Denton was one executive who agreed to forgo payments under a six-month bonus plan to focus attention on the “urgent need” to get bonuses for the other 110 employees approved, according to the Associated Press at the time. The report said that Denton had been in line for a bonus of up to $2.5 million.
While the three other officers and their potential bonus amounts were not identified, Dura listed the four members of its “leadership team” as Denton, chief financial officer C. Timothy Trenary; chief operating officer-automotive group David T. Szczupak; and chief administrative officer Theresa L. Skotak. Trenary, also a vice president, joined Dura last September.
The company designs and makes driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry.
