Dura files amended plan, to exit bankruptcy as private company

By Caroline Salls

Pittsburgh, Oct. 1 - Dura Automotive Systems, Inc. filed an amended plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware that changes the distribution to senior noteholders to allow Dura to exit bankruptcy as a private company.

According to the disclosure statement, Dura has reached a global resolution of all of the official committee of unsecured creditors' objections to the plan.

Under the agreement with the committee, the rights offering backstop party can terminate the backstop rights purchase agreement if there are 300 or more holders of new common stock on the plan effective date.

In addition, the agreement provides for payment of the fees and expenses of the trustees for Dura's subordinated notes and convertibles notes.

In exchange, the committee has agreed to support the plan.

Under the amended plan, the senior notes claims class will be divided into two categories.

Holders of class 3A senior note claims will recover 55% of their claims though a senior notes distribution and an option to purchase shares of common stock under a rights offering.

Meanwhile, holders of class 3B senior notes claims will recover 55% in cash equal to the product of their share of the senior notes distribution and the new common stock price. Class 3B claimants will not be allowed to participate in the rights offering.

To keep the number of new common stockholders below 300, reorganized Dura will have the right to designate a class 3A claim as a class 3B claim.

Under the original plan, holders of senior notes claims were scheduled to recover 56% through their share of new common stock in the reorganized company, plus the distribution that would otherwise have been paid to subordinated noteholders and holders of convertible subordinated debentures.

As previously reported, Dura noteholder Pacificor, LLC has agreed to underwrite 100% of the company's rights offering, which will give senior noteholders the right to purchase offering shares that will constitute 39.3% to 42.6% of the new common stock to be issued by reorganized Dura.

Specifically, if the rights offering amount is $150 million, participants will receive 41% of the new common stock in reorganized Dura. The percentage of new common stock will increase or decrease by 0.8% for each $5 million increase or decrease in proceeds above or below $150 million, with a maximum rights offering of $160 million and a minimum of $140 million.

According to the disclosure statement, the plan will eliminate $1.3 billion in pre-bankruptcy debt and replace it with an up to $400 million exit facility.

Dura said the exit facility will include a $275 million term loan and $125 million in revolving credit and letter-of-credit facilities.

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of $20.9 million in administrative claims, $9.9 million in priority tax claims, $200,000 in other priority claims and $225 million in second-lien facility claims will recover 100% in cash;

• Holders of $1.2 million in other secured claims will recover 100% through either reinstatement of the claim, return of the collateral securing the claim or cash;

• Holders of $418.7 million in senior notes claims will be divided into two categories. Class 3A claimants will recover 55% through their share of a senior notes distribution and an option to buy new common stock under the company's rights offering.

Holders of class 3B claims will recover 55% in cash equal to the product of their share of a senior notes distribution and the new common stock price;

• Holders of other general unsecured claims with claims worth more than $75,000 will receive a share of new common stock in the reorganized company, and holders of other general unsecured claims worth less than $75,000 can elect to receive either new common stock or cash; and

• Holders of $560.7 million in subordinated notes claims, $58.3 million in convertible subordinated debentures claims, other subordinated claims and old equity interests will receive no distribution under the plan.

The hearing on approval of the disclosure statement is scheduled for Oct. 3.

Dura, a Rochester Hills, Mich.-based automotive parts maker, filed for bankruptcy on Oct. 30, 2006. Its Chapter 11 case number is 06-11202.

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