Collins & Aikman has filed a reorganisation plan with the bankruptcy court in Detroit and hopes to exit Chapter 11 early next year.

"While we still have more to accomplish to complete our reorganisation, filing our plan brings us significantly closer to successfully reorganising C&A for the benefit of our more than 12,000 employees, as well as our stakeholders and valued customers," said Frank Macher, president and chief executive officer.

The company's secured debt will be converted into common stock in a reorganised Collins & Aikman.

It will be possible for someone to buy the company before it emerges from bankruptcy.

The plan is subject to bankruptcy court approval.

Collins & Aikman specialises in cockpit modules and automotive floor and acoustic systems and also makes instrument panels, plastic-based trim, and convertible top systems.

There have been rumours of potential buyers but tough conditions in the US market have so far appeared to deter firm bids.