Visteon Gets More Time to Seek Reorganization Plan

After late last week bankrupt American supplier filed an amended reorganization plan, the US Bankruptcy Court for the District of Delaware granted the company more time to win support for the strongly disputed plan. No new date of reexamination has yet been announced.

According to Autonews, the judge granted Visteon's request despite objections from shareholders. The current reorganization proposal calls for Visteon retaining the US defined benefit pension plans. As already announced by several interested parties, the new plan leaves bondholders and unsecured creditors impaired, with no recovery provided for holders of Visteon's equity.

At least two related investors made a request to the Wilmington bankruptcy court, asking it to reject the proposed reorganization plan submitted by Visteon, the company fought back, asking the court to prevent competing reorganization plans from being submitted.

For its executives alone, the current plan puts aside $237 million in stock. This after in July last year, Ford had to step in and oppose an employee incentive program which called for $80.3 million in bonuses to be handed to employees to "insure their good performance through the bankruptcy process."

The provisions of the reorganization plan are listed below.
  • a rights offering sub-plan under which certain unsecured bondholders would have the opportunity to receive 95 percent of the
  • equity in reorganized Visteon in exchange for $1.25 billion in cash raised through a backstopped equity rights offering. The remaining 5 percent in equity would be distributed among unsecured bondholders
  • a claims conversion sub-plan, similar to the plan filed by Visteon on March 15, 2010, under which the term loan lenders would receive approximately 85 percent of the equity in reorganized Visteon and unsecured bondholders would receive approximately 15 percent of the equity
  • other general unsecured creditors would receive a cash payout
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Daniel Patrascu
Daniel Patrascu profile photo

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.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories