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March 20, 2008 |
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DURA AUTOMOTIVE: Files Amended First Revised Chapter 11 Plan DURA Automotive Systems, Inc., and its debtor affiliates filed an amended First Revised Joint Plan of Reorganization and Disclosure Statement explaining the Plan on March 13, 2008. The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on April 3, 2008, to determine whether the Disclosure Statement contains adequate information. Disclosure Statement Objections must be filed on or before March 28. The Debtors will begin soliciting votes on the Revised Plan upon approval of the Disclosure Statement. According to Lawrence A. Denton, DURA's chairman, president and chief executive officer, despite the Debtors' progress -- with the overwhelming support of their creditor constituencies -- to the very cusp of confirmation, they were unable to proceed further with the Original Plan, filed Aug. 22, 2007, because they could not obtain the sufficient exit financing on acceptable terms in view of tightening credit markets and a deteriorating outlook in the North American automotive sector. The Original Plan had contemplated payment in cash, in full, of all Class 2 - Second Lien Facility Claims, a backstopped rights offering open to certain Class 3 Claims and certain Class 5 claims, and an equity or cash distribution equal to approximately 55% for the Class 3 Claims and 22% for the Class 5 Claims. However, without the level of exit financing envisioned by the Original Plan, these recoveries are no longer realistic. The Debtors and their creditor constituencies, therefore, devised the Revised Plan based upon equitizing claims in Classes 2, 3 and 5. Exit Financing The Revised Plan contemplates that on or before the Effective Date, the Reorganized Debtors will enter into definitive documentation with respect to: (a) an exit credit facility comprised of: -- a US$150,000,000, first lien term loan, and -- a US$110,000,000, revolving credit facility, which includes a US$25,000,000, letter of credit sub facility; and (b) a New Money Second Lien Loan with certain existing creditors that will provide a second lien secured term loan with a new capital infusion of US$80,000,000, and a face amount of US$100,000,000. US$440-Mil. to US$550-Mil. Reorganization Value DURA, with the help of its financial advisor, Miller Buckfire & Co., LLC, prepared a valuation of the company's going concern value post-confirmation. Miller Buckfire estimates that the total enterprise value of the Reorganized Debtors will be between US$440,000,000, and US$550,000,000, with a mid-point of US$495,000,000, as of an assumed May 31, 2008 Effective Date. In August 2007, Miller Buckfire estimated that the total enterprise value of the Reorganized Debtors is between US$540,000,000 and US$660,000,000, with a US$600,000,000 mid- point, as of an assumed Effective Date of November 1, 2007. Miller Buckfire also estimates that the range of total equity is between US$257,000,000 and US$367,000,000, with a mid-point of US$312,000,000. To calculate the estimated value of common equity, Mr. Denton relates that Miller Buckfire deducted Convertible Preferred Stock at its liquidation preference as of the Effective Date of US$228,000,000, from total equity value. Miller Buckfire estimates the range of common equity value to be between US$29,000,000 and US$319,000,000, with a mid-point of US$84,000,000. Pension Plans The Reorganized Debtors will continue to sponsor and maintain pension plans unless terminated before the entry of the Confirmation Order. All Compensation and Benefits Programs will be treated as executory contracts and deemed assumed on the Effective Date, except for, among others, Compensation and Benefits Programs specifically rejected pursuant to the Plan and all employee equity or equity based incentive plans. Mr. Denton relates that each of the Debtors is either a sponsor or a controlled group member of a sponsor of four pension plans covered by the Employee Retirement Income Security Act: Pension Plan EIN-PN ------------ ------ DURA Master Pension Plan 382961431/001 DURA Automotive Systems, Inc. 382961431/004 Mancelona Union-Represented Employees' Pension Plan Atwood Mobile Products, Inc. 364334203/005 Supplementary Retirement Plan DURA Retirement Plan for 364334203/024 La Grange Bargaining Employees Mr. Denton says the Pension Benefit Guaranty Corporation has the authority to initiate termination proceedings, subject to certain statutory rights, regarding the Pension Plans. If the Pension Plans were to terminate before the date of Plan confirmation, certain claims, including claims that may be entitled to priority under various Bankruptcy Code provisions, would arise. In the event that the Pension Plans do not terminate before the Confirmation Date, all claims of, or with respect to, the Pension Plans, including the PBGC's claims for unfunded benefit liabilities, for termination premiums, and for unpaid contributions owing to the Pension Plans, will become obligations of the Reorganized Debtors and each member of any controlled group, and will be unaffected by the confirmation of the Plan. There will be no discharge in favor of any Reorganized Debtors with respect to any fiduciary Claims under ERISA, any Pension Plan-related Claims, and any PBGC Claims. Special Transaction Committee The Revised Plan provides that a Special Transactions Committee will be created to initiate a redemption of Convertible Preferred Stock at any time, provided that the post-transaction cost of funds meets certain customary parameters for refinancing indebtedness typically found in an indenture. Any redemption using funds from debt senior to the Convertible Preferred Stock if the size of the proposed redemption is less than US$112,500,000, must be approved by the entire Board of Directors. Canadian Creditor Distribution The Revised Plan also provides that cash will be distributed pro rata to holders of Allowed Canadian General Unsecured Claims equal to the higher of (a) the median value of Dura Automotive Systems (Canada), Ltd.'s assets in a liquidation; or (b) the median value of the Dura Canada's assets in a liquidation. Allowed Canadian General Unsecured Claims are claims filed against Dura Canada. Mr. Denton says no claims, other than intercompany claims, are pending against the other Dura affiliates in reorganization under the Canadian Companies' Creditors Arrangement Act. Proposed Confirmation Timeline DURA asks the Court to set this time line for the solicitation of votes and confirmation of its Plan: April 10, 2008 -- Commencement of solicitation on the Plan May 2, 2008 -- Confirmation Objection Deadline May 7, 2008 -- Voting Deadline May 13, 2008 -- Confirmation Hearing Mr. Denton asserts that a "fast-paced confirmation time line" is needed to accommodate the terms of the $170,000,000 Replacement Facility extended by Ableco Finance LLC. The Replacement Financing provides that DURA has to have the revised Disclosure Statement approved by May 15 and the Plan confirmed by June 9. The Replacement Financing gives DURA until June 20 to exit from Chapter 11. The Replacement Financing will mature on June 30. A full-text copy of a blacklined version of the Plan is available for free at http://bankrupt.com/misc/DURAblacklinedPlan.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/DURA_AmendedDiscStatement.pdf About DURA Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/ -- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co- counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. The Debtors have asked the Court to extend their plan filing period to April 30, 2008. (Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). |
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