US: Lear files for Chapter 11 with lender support
Bankrupt auto seat and electrics specialist Lear Corporation on Tuesday said it had received the support it needed from bank lenders and bondholders to progress with its restructuring plan and had filed for Chapter 11 bankruptcy protection in New York. Subsidiaries outside the US and Canada were not included.
Lear said it had support from additional secured lenders and bondholders and had entered into agreements supporting the restructuring plan with approximately 68% in principal amount of its secured lenders and more than 50% in principal amount of its bondholders.
Under the proposed restructuring plan, which needs to be approved by bankruptcy court, Lear's trade creditors will be paid in full with some exceptions. It has filed motions seeking to continue to pay trade creditors under normal terms.
The company also said it had sought court approval to continue to pay employees worldwide without interruption and to continue normal funding of pension obligations in the US and Canada.
Chairman, CEO and president Bob Rossiter said: "We are conducting business as usual and are very pleased to have received strong support from our lender and bondholder groups for our debt restructuring plan.
"We intend to proceed on an expedited basis and expect to submit the plan to the bankruptcy court within 60 days. Our goal is to emerge from this process quickly and with an appropriate capital structure to support our long-term business objectives as a leading global competitor with the financial flexibility to build on our strengths and take advantage of future growth opportunities."
As previously announced, Lear has obtained US$500m in new debtor-in-possession (DIP) financing from a syndicate of secured lenders, led by JP Morgan and Citigroup.
Lear has also filed several other customary 'first day motions' with bankruptcy court.