Lear to Exit Bankruptcy

As the dust begins to settle over last summer's wave of bankruptcy fillings, companies which experienced difficulties began shedding their old selves and emerge better, cleaner and... restructured. So is the case of American supplier Lear, who managed to get the court's approval for its reorganization plans, four months after filing for bankruptcy.

"Today's confirmation is an important milestone for Lear. Thanks to the diligent work of our employees and the tremendous support we have received from our customers, suppliers, secured lenders, bondholders and others, we have moved through the restructuring process expeditiously," Bob Rossiter, Lear CEO was quoted as saying by just-auto.com.

Lear filed for bankruptcy in July, together with certain of its U.S. and Canadian subsidiaries. At the time, it planned to stay under bankruptcy protection for at most 60 days and received commitments from a syndicate of secured lenders.

Later the same month, Lear announced it has reached a tentative deal with the UAW on a contract for some 700 hourly workers at seating plants in Arlington and Wentzville. Terms of the contract were not disclosed.

The approved reorganization plan was filed in August and called for lenders to convert $1.6 billion plus interest into new term loans, while the remaining $2 billion unsecured claims and notes be converted in common stock and warrants in the new company.

The emergence from bankruptcy should become effective on November 9.

"Upon emergence, we will have substantially lower debt, a strong and flexible balance sheet and in excess of one billion dollars in cash. This capital restructuring, combined with the significant operational restructuring we have completed since mid-2005, positions our company for profitable growth and long-term success," Rossiter concluded.