Visteon gets court approval for $150 million in financing
By Andrew C., 30 Aug, 2010. 0 Comments
Despite the protests from unsecured creditors, Visteon Corp. received the bankruptcy court‚ approval last Thursday for several deals that will help it restructure operations and secure financing. The parts supplier got the nod from a bankruptcy judge in Delaware for $150 million in financing to support its operations as it reorganizes under court protection. Continued after the jump!
Last May, Visteon filed for bankruptcy and has since then funded operations by using cash the company was holding as collateral for its borrowings.. In fact, Ford Motor Co., Visteon's former parent and its biggest customer, funded Visteon's first month in Chapter 11. Marc Kieselstein, an attorney for Kirkland & Ellis, which represents Visteon, said that based on the debtor‚ cash forecast, there is a need for the debtor-in-possession, or DIP, financing.
Visteon‚ attorneys claimed during the hearing that without financing, the company will run out of cash in March. On the other hand, the judge overruled objections from unsecured creditors, who said it was a "grab" of collateral and control of the bankruptcy by senior lenders in return for financing that was not needed at the moment.
Robert Stark of Brown Rudnick, which is representing the court-appointed committee of unsecured creditors, called Visteon‚ action as a ‚Äúcosmetic DIP.‚Äù He explained that Visteon is a company that‚ ‚Äúdoing quite nicely in Chapter 11‚Äù and is certainly not in an emergency situation.
[via autonews]
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