It looks like Lear in next in line for a bankruptcy filing. The recession has hit all levels of the transportation industry. Here is an recent article that discusses the news.
Lear In Debt-Restructuring Pact, Plans Bankruptcy Filing
By Jeff Bennett and Kate Haywood
Of DOW JONES NEWSWIRES
Lear Corp. (LEA), a maker of automotive seats and interior electronics, reached a tentative agreement with lenders to restructure its debt and said it plans to file for Chapter 11 bankruptcy protection shortly.
While Lear is the latest supplier to succumb to falling worldwide auto sales, its fate is being closely watched for possible knock-on effects in the global supply chain and as a test of lender sentiment in the sector.
The company is one a handful of large seat suppliers, with more than two-thirds of its sales outside the U.S., and analysts said any interruption in production could hit a swathe of auto manufacturers.
The Southfield, Mich., supplier received commitments from a syndicate of secured lenders, led by JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), for $500 million in new debtor-in-possession financing. That financing will convert into exit financing with a three-year term upon Lear's emergence from bankruptcy protection.
JPMorgan declined to comment. A Lear spokesman declined to say where the company will file for bankruptcy protection.
"We want to assure everyone - customers, suppliers, employees, and the communities of which we are a part - that Lear is committed to positioning our business for sustainable success," Lear Chief Executive Officer Robert Rossiter said in a written statement. "We believe that the agreement in principle with the steering committees of our secured lenders and bondholders to support our plan of reorganization will enable us to emerge expeditiously."
Lear's units outside the U.S. and Canada won't be part of the bankruptcy filing. It said its operations outside the U.S. and Canada are well-capitalized, well-positioned and have a strong backlog of new business.
Lear would be the eighth major supplier to seek Chapter 11 protection since 2005 and the third parts maker to file in the past month. Visteon Corp. (VSTN) and Metaldyne Corp. entered bankruptcy May 28.
The U.S. company has been on bankruptcy watch since missing a coupon payment on June 1 amid an ongoing restructuring and efforts to repair its balance sheet and secure alternative debt and equity funding. Lear had 30 days to make the $38 million payment.
Lear prospered during the 1990s as the U.S. market for pickup trucks and sport-utility vehicle expanded, boosting interior, seating and electronics content.
The market changed in mid-2005 as skyrocketing raw-material prices combined with overcapacity in the industry to erode Lear's profit margins. The company's interior's division, which produced plastic products such as door trims, was the hardest hit. The company later divested itself of the unit.
Still, Lear couldn't sidestep the slide in global auto sales and the tougher contract terms sought by manufacturers. The company's revenue dropped 44% to $2.2 billion in the first quarter of 2009.
In 2007, billionaire investor Carl Icahn offered to buy out the company for $37.25 a share. Investors, who said Lear was worth double that amount, rejected the offer and Icahn walked away from the deal.
-By Jeff Bennett and Kate Haywood, Dow Jones Newswires;
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Gonzalez & Waddington are Augusta GA bankruptcy lawyers and GA bankruptcy attorneys that assist our clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.
What is a discharge in bankruptcy? - Bankruptcy Lawyer Augusta GA
What is a discharge in bankruptcy?
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
http://www.uscourts.gov/
Gonzalez & Waddington are Augusta GA bankruptcy lawyers and GA bankruptcy attorneys that assist our clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
http://www.uscourts.gov/
Gonzalez & Waddington are Augusta GA bankruptcy lawyers and GA bankruptcy attorneys that assist our clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.
When does the discharge occur?
The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual chapter 11 cases, and in cases under chapter 12 (adjustment of debts of a family farmer or fisherman) and 13 (adjustment of debts of an individual with regular income), the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor's discharge in a chapter 7 or 13 case if the debtor fails to complete "an instructional course concerning financial management." The Bankruptcy Code provides limited exceptions to the "financial management" requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.
http://www.uscourts.gov/
Gonzalez & Waddington are Augusta GA bankruptcy lawyers and GA bankruptcy attorneys that assist our clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.
Our bankruptcy law firm is located in Augusta, Georgia. Our Georgia bankruptcy lawyers represent clients in Augusta & throughout the CSRA, including Columbia County, Richmond County, Lincoln County, McDuffie, Jefferson and Burke Counties, Evans, Appling, Waynesboro, Louisville, Thomson, Lincolnton, Girard Georgia & Aiken, South Carolina & North Augusta SC.
The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual chapter 11 cases, and in cases under chapter 12 (adjustment of debts of a family farmer or fisherman) and 13 (adjustment of debts of an individual with regular income), the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor's discharge in a chapter 7 or 13 case if the debtor fails to complete "an instructional course concerning financial management." The Bankruptcy Code provides limited exceptions to the "financial management" requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.
http://www.uscourts.gov/
Gonzalez & Waddington are Augusta GA bankruptcy lawyers and GA bankruptcy attorneys that assist our clients in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Augusta GA.
Our bankruptcy law firm is located in Augusta, Georgia. Our Georgia bankruptcy lawyers represent clients in Augusta & throughout the CSRA, including Columbia County, Richmond County, Lincoln County, McDuffie, Jefferson and Burke Counties, Evans, Appling, Waynesboro, Louisville, Thomson, Lincolnton, Girard Georgia & Aiken, South Carolina & North Augusta SC.
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