Visteon Files for Bankruptcy
"Visteon is taking this step to maximize the long-term value of the company. During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment," Visteon Chief Executive Donald Stebbins said in a statement.
The bankruptcy filing will not affect any of the company's subsidiaries and joint ventures operating outside the US. In the country, among its largest unsecured creditors are a unit of Bank of New York Mellon Corp (bond debts), the Pension Benefit Guaranty Corp and IBM.
Ford, the largest customer in Visteon's portofolio, stepped in to back its former unit, saying that the manufacturer will support debtor-in-possession financing for the restructuring process and will try to ensure the continuity of supply.
The news of Visteon's filing does not come as an unexpected outcome. The company warned of a possible filing since May 12, as talks with lenders came to no conclusion. In mid May, Ford assumed a $163 million secured revolving credit from some of the lenders.
In addition, the company filed "first day motions" with the court to ensure clean transition into Chapter 11. The first day motions request the authority to continue serving consumers and honoring customer programs, as well as paying critical suppliers and honoring employee obligations.