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Auto-Parts Supplier Lear Corp Files for Chapter 11 Bankruptcy: Outlines Reorganization Plan
By Amarendra Bhushan for CEOWORLD Magazine Updated:July 7, 2009
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Automotive parts supplier Lear Corp.pressured by the difficulties at automakers General Motors and ford, plans to restructure about $2.3 billion in debt under a proposed bankruptcy.
In its bankruptcy filing, Lear listed total assets of about $1.27 billion and total liabilities of about $4.54 billion.
Last week it received a commitment for $500 million in loans to finance its bankruptcy from a group of lenders led by JPMorgan Chase and Citigroup.
Lear Corporation, a leading global supplier of automotive seating systems, electrical distribution systems and electronic products, Under the proposed restructuring plan, which needs to be approved by the Bankruptcy Court, Lear’s trade creditors will be paid in full subject to certain limited exceptions. To this end, the Company has filed motions seeking to continue to pay trade creditors under normal terms in the ordinary course of business.
Bob Rossiter, Lear’s Chairman, Chief Executive Officer and President, 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.”
- Lear Corp.’s board of directors — except CEO and Chairman Robert Rossiter — could be replaced when the company’s proposed Chapter 11 reorganization plan takes effect.
- Lear will have a nine-member board after its plan to revamp $2.3 billion in debt is approved.
Lear’s current board consists of Rossiter and eight other directors: David Fry, president of Northwood University; Conrad Mallett Jr., CEO of Sinai Grace Hospital in Detroit; Larry McCurdy, chairman of auto supplier Affinia Group Inc.; Roy Parrott, former president of business operations for Metaldyne Corp.; David Spalding, vice chairman of private equity firm The Cypress Group L.L.C.; James Stern, chairman of the Cypress Group; Henry Wallace, a 30-year veteran of Ford Motor Co. and current member of the boards of AMBAC Financial Group Inc., Hayes-Lemmerz International Inc. and Diebold Inc.; and Richard Wallman, former CFO of Honeywell International.
Lear Corp’s Milestones
1988: Ken Way, Robert Rossiter lead leveraged buyout of Lear Siegler Seating
1993: Ford’s seat-making operations acquired
1994: Initial public offering completed
1995: Automotive Industries Holdings is acquired to bolster interior trim business
1996: Masland acquired for carpet and compartment trim
1999: Lear buys United Technologies Automotive, putting Lear in position to sell electronics and fully integrated auto interiors
2000: Global sales reach $14.07 billion, up from $3.15 billion in 1994
2003: Lear wins GM award for full interiors on Buick Lucerne and Cadillac DTS beginning in 2006 model year
2004-05: GM, Ford end interiors outsourcing experiment and bring interior design back in-house
2006: Lear agrees to sell $3 billion interior trim business to Wilbur Ross
2007: Shareholders reject Carl Icahn’s $5.3 billion buyout offer
2009: Lear files for Chapter 11 reorganization
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