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DETROIT — Auto supplier Dura Automotive Systems on Friday confirmed it has emerged from Chapter 11 bankruptcy protection after 20 months.

A U.S. Bankruptcy Court judge in Wilmington, Del., approved the company's reorganization plan May 13, and Dura officially emerged from court protection Wednesday, June 25.

"This has been an extremely difficult process," CEO Larry Denton said in an interview with Automotive News. "It is a credit to our team to have been able to exit protection in this environment."

Denton, 57, will remain CEO of the company but is stepping down as chairman. Dura's newly appointed board is naming longtime supply chain executive Tim Leuliette as chairman. Leuliette, 58, last year stepped down as CEO of Metaldyne Corp. and now heads Leuliette Partners LLC.

After years of borrowing to acquire smaller suppliers, Dura had built a debt-to-equity ratio of 12.1 before it went into bankruptcy. Through bankruptcy, it reduced its debt ratio to 1.5.

Dura's reorganization plan called for senior-level debt and unsecured claims to receive 100 percent of the stock in the reorganized company. Dura said its pre-bankruptcy subordinated debt and stock equity were wiped out.

Key moves

Faced with heavy debt, Dura in recent years took on various restructuring efforts, back-office consolidation, asset sales and plant closings — even before entering bankruptcy. Denton said those moves were key to a successful reorganization.

"We started operational restructuring before we filed," Denton said. "We knew there were troubled times ahead."

Hedge fund operator Pacificor LLC, of Santa Barbara, Calif., will be the largest shareholder of the reorganized Dura, controlling between 35 and 40 percent of the equity, Denton said.

Blackstone Group LP, a New York private equity firm with several automotive holdings, will be Dura's second-largest shareholder.

The new Dura stock will trade over the counter under the symbol DRRAQ.

Dura leaves bankruptcy with a realigned network of factories largely in low-cost countries. It has set up regional hubs that allow it to supply U.S. auto plants from Mexico and western European plants from eastern Europe.

Supplying the United States from Mexico has helped Dura escape the fate of suppliers that moved to China and now are being squeezed by fuel costs, Denton said.

Growth in India

Dura also has shifted production to China and India, but Denton said 80 to 90 percent of the parts produced there are for local markets. He said the company has exceeded growth targets by five times in India and is building relationships with such Indian automakers as Tata Motors and Mahindra & Mahindra Ltd.

"I don't see any stopping us," Denton said of the move to India. "I think this is going to continue to move."

Dura also has shifted its sales overseas. The company estimates that the United States will make up only 24 percent of 2008 sales. It predicts Europe will make up 52 percent.

Ford Motor Co. remains the largest customer, Denton said, but a large portion of Dura's sales to Ford are to European plants or its recently sold Land Rover and Jaguar brands. Chrysler LLC is Dura's second-largest customer.

Volkswagen AG is the third-largest, and Renault-Nissan is the fourth-largest.

Dura makes a variety of parts, including seating controls, glass systems, door modules and hinges.

The company filed for Chapter 11 protection in October 2006. It was one of several major U.S. auto suppliers, including Delphi Corp. and Dana Corp., that had sought protection in recent years because of lower North American vehicle production and higher raw material costs.

Dura ranks No. 88 on the Automotive News list of the top 100 global suppliers, with worldwide original-equipment automotive parts sales of $1.89 billion in its 2007 fiscal year.