October 17, 2019 − Dura Automotive Systems, LLC and six affiliated Debtors (“Dura” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Middle District of Tennessee, lead case number 19-06741. The Debtors, a leading global automotive systems supplier and 73.1% owned by Lynn Tilton's Patriarch Partners, LLC, are represented by William L. Norton III of Bradley Arant Boult Cummings LLP. Further board-authorized engagements include (i) Kirkland & Ellis LLP as bankruptcy counsel, (ii) Portage Point Partners, LLC (“Portage Point”) as restructuring advisor, (iii) Jefferies LLC (“Jefferies”) as and investment banker and (iv) Prime Clerk LLC as claims agent.
The Debtors’ lead petition notes between 1,000 and 5,000 creditors; estimated assets between $100.0mn and $500.0mn; and estimated liabilities between $100.0mn and $500.0mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) Advance Freight Traffic Serice ($2.9mn trade debt), (ii) Plasti-Paint Inc. ($1.5mn trade debt) and (iii) Young Technology Inc ($1.1mn trade debt).
Auburn Hills, Michigan-based Dura emerged from nearly two years in Chapter 11 bankruptcy in June 2008 and was purchased by Patriarch Partners at the end of 2009.
In a press release announcing the present filing, the Debtors advised that “… it is moving forward with a restructuring process to facilitate an infusion of new capital and to pursue an expedited going-concern sale process that will fuel the future growth of the Company. To implement this restructuring, the Company and its domestic subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Tennessee. DURA’s non-U.S. subsidiaries are not part of the Chapter 11 filing.
The Company expects this expedited sales process, including the closing on the 363 sale, to be completed within approximately 120 days. A Transaction Committee consisting of two independent directors has been appointed to provide for a clear and quick sales process."
Lynn Tilton, CEO of DURA, added: “Ongoing constituent disputes have made it impossible for DURA to access ordinary course, yet essential financing. The actions announced today will allow the Company to move forward and access the necessary capital that will fuel its growth. I look forward to working closely with DURA’s leadership and its talented and dedicated work force throughout this process as we continue the transformation of this great company.”
DIP Financing
DURA has obtained a commitment from Ark II CLO 2001-1, Ltd., an entity controlled by Lynn Tilton for a $77.0mn debtor-in-possession ("DIP") financing facility, including $50.0mn of new money, the proceeds of which will be used to fund the Company’s ongoing business operations, including capital expenditures for future platforms. This facility will allow DURA to continue business as usual while pursuing a section 363 sale process. In connection with the 363 sale process, an entity controlled by Ms. Tilton has proposed to purchase DURA’s assets and assume all customer, trade, and employee obligations (including pension obligations), subject to higher and better bids from other potential purchasers."
About the Debtors
DURA Automotive Systems is a leading global automotive supplier specializing in the design, engineering, and manufacturing of innovative solutions that drive the evolution of mobility. Founded in 1914, the company invests in five pillars of technological advancement including vehicle lightweighting, design aesthetics, amalgamated mechatronics, advanced safety & advanced mobility, and the fusion of HMI’s with infotainment. DURA employs more than 9,400 people in 14 countries. The company markets complete systems and modules to leading automakers in the Americas, Asia and Europe. Information about DURA and its products is available at www.duraauto.com.
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