VAN BUREN TOWNSHIP, Mich. — The Detroit Free Press has reported that a group of Visteon shareholders have asked the bankruptcy judge in charge of Visteon’s Chapter 11 case to appoint an examiner to review whether shareholders could be paid in conjunction with Visteon’s bankruptcy case.
As it stands now, Visteon’s plan does not include any compensation for shareholders, which is common in bankruptcy cases, the Free Press noted.
The court is scheduled to hold a hearing April 13 on the auto parts supplier’s Amended Plan of Reorganization, which includes recoveries to unsecured creditors, including bondholders and trade creditors. The term lenders will receive 85 percent of the common stock in reorganized Visteon. Holders of Visteon’s 12.25 percent senior notes will receive their pro rata share of approximately 6 percent of the common stock (representing a recovery of more than 50 percent of the face value of their claims). Holders of Visteon’s other unsecured notes and non-trade claims will receive their pro rata share of approximately 9 percent of the common stock (representing a recovery of approximately 20 percent of the face value of their claims). Trade creditors will receive cash in an amount equal to their pro rata share of $23.9 million, an approximate 50 percent recovery. Although these distributions are a significant improvement over the proposed distributions in the originally filed plan of reorganization, the amended plan still leaves the bondholders and other general unsecured creditors substantially impaired. As such, the amended plan does not provide for any recovery to holders of Visteon’s equity securities. The shareholders’ request also will be considered at the April 13 hearing.
