Lear on the brink of bankruptcy

[rickaren]

Lear on the brink of bankruptcy

Posted Tuesday, Jun 30, 2009, 9:58 am in Employee News

Southfield, Mich.-based auto supplier Lear Corp. has until the end of the day Tuesday to make an interest payment to its bondholders and to reach a deal with its banks to stay out of bankruptcy, the Detroit News reported.

Lear, the world’s second-largest automotive seatmaker, is one of several suppliers that have run into financial trouble as auto sales plummeted, pushing it to the brink of a Chapter 11 filing, the paper said. More than a dozen auto suppliers have filed for bankruptcy reorganization in the United States this year, as they struggle to maintain the terms of their loan agreements amid falling revenues, the Free Press said.

Lear defaulted on its credit agreements last year when the company tapped a $1.2 billion credit line, and did not repay money owed on that credit line, the paper said. Since then, the company has negotiated two waivers with its banks and the latest one expires tomorrow. Also tomorrow, time will run out for Lear to make a $38 million interest payment to its bondholders, the story said. (Detroit Free Press)

[rickaren]

Lear confirms plans for Chapter 11 filing

Posted Thursday, Jul 2, 2009, 2:36 pm in Employee News

Southfield, Mich.-based Lear Corp. said Wednesday it will file for bankruptcy protection after securing $500 million in financing to help it right its finances under court oversight, The Detroit News reported.

Lear is the latest troubled auto supplier hit by the sharp downturn in vehicle production. At least 20 auto suppliers have filed for bankruptcy this year, the paper said. The Obama administration has rebuffed a request last month by suppliers for $10 billion in direct aid, the News reported.

Lear said it would “commence shortly” a Chapter 11 filing, though the company declined to say where or when it would file, the paper said. The announcement came a day after the auto supplier skipped a $38 million debt payment, the story said. (The Detroit News)

[rickaren]

Seat maker Lear files for bankruptcy

Posted Tuesday, Jul 7, 2009, 10:29 am in Employee News

Southfield, Mich.-based seat maker Lear Corp. said it filed for bankruptcy early this morning after winning support for its reorganization plan from more of its lenders and bondholders, the Detroit Free Press reported.

In a securities filing made Monday, the supplier, which said last Wednesday that it planed to file for bankruptcy, revealed plans for its bankruptcy reorganization, the paper said. Lear’s plans include cutting its debt by 70%, from $3.6 billion to about $1.1 billion, not including new preferred and common stock issued when the company emerges from bankruptcy, the Free Press said.

Existing shares, which trade over the counter and were delisted from the New York Stock Exchange on Thursday, will be wiped out, the paper said. Lear, in its filing, said it plans to maintain its pension and health care benefits, the story said. (Detroit Free Press)