Collins & Aikman Corp. intends to exit Chapter 11 bankruptcy protection as a stand-alone company.
The Troy, Mich.-based automotive cockpit and interiors supplier filed its long-awaited plan of reorganization Aug. 30 in U.S. Bankruptcy Court in Detroit.
The firm 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.
The plan is subject to final approval by creditors and the court. Potential buyers can step forward any time before that to make a bid for the firm.
That includes billionaire investor Wilbur Ross, who has expressed an interest in buying C&A out of bankruptcy. But this month he told Automotive News that his interest in the North American interiors sector had cooled because of falling Big Three vehicle sales.
The company filed for Chapter 11 on May 17, 2005, and has streamlined by closing plants, exiting the fabric business and selling its European operations. Its global sales in 2005 totaled $2.8 billion vs. $4 billion in 2004.
Confirmation of the reorganization plan still requires customer agreements, resolution of government investigations and labor-agreement modifications, C&A said in a news release. The government investigations began after C&A slid chaotically into Chapter 11 protection in May 2005, without cash or a survival plan. The firm today employs about 12,000.
Under the announced reorganization plan, unsecured creditors who vote for the plan will receive warrants for their claims and interests in a litigation trust.