From AFX News Limited

WASHINGTON -- A bankruptcy judge has approved an agreement between Tower Automotive Inc. and Comerica Leasing Corp. that will save the troubled auto-parts supplier $1.85 million in equipment costs over the next four years.

Judge Allan L. Gropper of the U.S. Bankruptcy Court in Manhattan ruled last week that the agreement appeared to be "in the best interests of the debtor's estates, their creditors and other interested parties."

Under the new lease agreement, by 2010 Tower will have paid Comerica $3.55 million for machines the company uses to stamp imprints into metal for customers DaimlerChrysler AG and Ford Motor Co. Under the terms of the old lease, Tower would have been responsible for $5.4 million.

"Ultimately, after Comerica agreed to certain price concessions and to a one-year extension of the term of the lease, the debtors determined it was in the best interests of the estate to reject the existing agreement and to enter into the new agreement with Comerica," Tower Automotive said in papers filed with the court.

Comerica leases heavy machinery and other equipment to companies in the manufacturing, transportation, railway, airline and service industries.

As a penalty for breaking its lease early, Tower Automotive has agreed to grant Comerica a general unsecured claim worth $840,000 -- an amount that would be collectible after Tower Automotive exits bankruptcy proceedings. Holders of general unsecured claims are among the last to get paid in bankruptcy cases and may end up recovering only a fraction of what they're owed.

Because Tower Automotive is under Chapter 11 protection, the new lease required approval from the bankruptcy judge overseeing the proceedings.

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