Collins & Aikman Corp. says it intends to exit Chapter 11 bankruptcy protection as a stand-alone company.
The automotive cockpit and interiors supplier filed its long-awaited plan of reorganization in U.S. Bankruptcy Court in Detroit late Wednesday night.
Collins & Aikman, of Troy, Mich., is recapitalizing by exchanging its secured debt for common stock in the reorganized company. Collins & Aikman said it plans to emerge from Chapter 11 no later than February, 2007.
The plan is subject to final approval by creditors and the court. Potential buyers can step forward any time before that approval to make a bid for the company.
That includes billionaire investor Wilbur Ross. Ross has expressed an interest in buying Collins & Aikman out of bankruptcy. But this month he told Automotive News that his interest in the North American interiors sector had cooled because of falling vehicle sales for the Detroit Three.
Collins & Aikman is one of the largest interiors suppliers in North America. Its parts, which include cockpits, door trim and carpet, are on virtually every North American vehicle made by the Detroit Three.
The company has streamlined in Chapter 11 by closing plants, exiting the fabric business and selling its European operations. Its global sales in 2005 totaled $2.80 billion vs. $4 billion in 2004.
Confirmation of the reorganization plan still requires customer agreements, resolution of government investigations and labor agreement modifications, the company said in a release. The government investigations began after Collins & Aikman slid chaotically into Chapter 11 protection in May 2005 without cash or a survival plan. The company today has about 12,000 employees.
Under the announced reorganization plan, unsecured creditors who vote for the plan will receive warrants for their claims and interests in a litigation trust.
You may e-mail David Barkholz at [email protected]