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Court Approves Visteon $150M Restructuring

Bankrupt American supplier Visteon announced today it has received court approval for a $150 million worth of deals which will allow it to restructure its operations and get financing for its reorganization plans.

"There is a foreseeable need for this DIP based on the debtor's cash forecast," Marc Kieselstein, attorney for Kirkland & Ellis, Visteon's representative, said according to Autonews. According to the supplier's attorneys, Visteon will run out of cash in March without the aforementioned debtor-in-possession financing.

"Here we have a company that is doing quite well, doing quite nicely in Chapter 11," Robert Stark of Brown Rudnick, which is representing the court-appointed committee of unsecured creditors told the source. "This is not an emergency situation. We call that a cosmetic DIP."

The court approval is even more important as Visteon's attempt to secure bonuses to 12 of its executives was rejected in the beginning of October. The bonuses, proposed in mid-August, although not important for the survival of the company per se, were called for by Visteon in order to insure its management stays through the bankruptcy process.

This was the second bonus scheme proposed by Visteon, after the one we mentioned earlier was also opposed by Ford and GM. At the time, Visteon motivated its plan by saying "this is one of a lot of tough deals."

Visteon filed for bankruptcy in May, in an attempt to protect its US operations. The company is working without any profit for the past nine years. In the bankruptcy papers, Visteon listed total assets amounting to $4.58 billion and a total debt of $5.32 billion.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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