Unsecured creditors of Collins & Aikman Corp. want to investigate purchasing practices of the Detroit 3 to see whether they contributed to the supplier's slide into Chapter 11.
The Official Committee of Unsecured Creditors wants documents from General Motors, Ford Motor Co. and DaimlerChrysler Corp. The creditors are looking for evidence that the companies shared price information that may have led to unprofitable contracts with Collins & Aikman.
U.S. Bankruptcy Court in Detroit denied an earlier, more general request for the documents. That request was made about two months after Collins & Aikman entered Chapter 11 protection in May 2005.
About 80 percent of Collins & Aikman's business is with the Detroit 3. The committee "seeks to investigate whether the principal customers exchanged competitively sensitive information."
In a separate motion, the creditors also want documents from Ford to investigate whether the automaker last year tried to gain control of Collins & Aikman's factory in Hermosillo, Mexico. The plant supplies interiors for Ford's critical Fusion sedan, which is built in Hermosillo.
The creditors want to know whether Ford tried to buy the plant from a lender, GE Capital's Mexican subsidiary, the committee said in a court filing this month. But the Mexican subsidiary never foreclosed on the plant's assets.
Ford spokesman Paul Wood says there's no basis for the committee's allegations in either motion. "It appears to be a desperation tactic," he said.
Collins & Aikman spokesman David Youngman declined to comment on the creditors' new filings.
In bankruptcy cases, unsecured creditors often receive pennies on the dollar for their claims, even if a debtor emerges from Chapter 11. That's because there typically is little money left over after secured lenders and bankruptcy lenders are paid.
In a court motion last week, Collins & Aikman said it planned to file a reorganization plan by Thursday, Aug. 31, that would provide secured lenders with equity in a reorganized company as compensation for their debt. It did not address whether unsecured creditors would get a piece of the reorganized company.
Collins & Aikman's customers, particularly the Detroit 3, lent the supplier $82.5 million to keep it operating in Chapter 11. They also granted price increases of another $82.5 million.
Collins & Aikman is one of North America's largest interiors suppliers. It expects revenue of about $2.5 billion in 2006.
You may e-mail Dave Barkholz at [email protected]