Dura supplier asks court to reconsider denial of contract clarification

By Rebecca Melvin

New York, Jan. 10 - Dura Automotive Systems Inc. supplier Allied Motion-Motor Products Inc. has asked the court to reconsider an order denying clarification of whether an Allied sales contract must be assumed by the purchaser of Dura's Atwood Mobile Products division, according to a filing with the U.S. Bankruptcy Court for the District of Delaware Wednesday.

The matter has been scheduled for hearing Jan. 29.

The court denied Allied's initial request Jan. 3. At that time, the court also denied Allied's alternative request for an allowed administrative claim for breach or repudiation damages.

In the original motion, Allied said the buyer of Atwood assets was obligated to assume its contract, otherwise Allied would be left with seven or eight months of inventory that couldn't be sold, resulting in estimated damages of $1.2 million to $1.6 million, plus $125,000 in expenses.

During the hearing on the original motion, the court denied Allied's request because Allied failed to satisfy certain rules. It denied Allied's alternative request on the basis that it was premature.

The new motion stated that Allied's original motion was based on the court's inherent authority to interpret and enforce its own rules. It didn't ask the court to change the existing sales contract, but rather sought interpretation and enforcement of rules, the motion stated.

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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