Shareholders seek examiner for Visteon bankruptcy
Shareholders of auto parts maker Visteon Corp
An examiner is needed because the company appears to be squandering significant value and proposing to wipe out shareholders while its operations are vastly exceeding projections, according to the filing from Friday.
The ad hoc group of shareholders also asked the judge to consider the request on short notice. The company will be seeking court approval next week of its disclosure statement, which will clear the way for Visteon to begin seeking votes from creditors on its reorganization plan.
Visteon's shares have risen from less than 2 cents in December to $1.65 on April 1, when the U.S. Trustee, which oversees bankruptcy cases, denied a request for an official committee of shareholders for Visteon.
An official committee would allow shareholders to speak with one voice and provide them a budget, paid for by Visteon, to hire advisers and carry out investigations.
Visteon amended its plan of reorganization last month to provide additional recovery for unsecured creditors, which it initially proposed to virtually wipe out. It still proposed wiping out shareholders.
As with the initial plan, the amended plan is based on an unrealistically low valuation of the company and a suboptimal capital structure, which together provide a windfall to the company's secured claimholders at the expense of the company's other creditors and shareholders, said the filing from the group of shareholders.
Unsecured creditors are also upset with the proposed reorganization, and asked the court permission's last week to craft their own plan.
The ad hoc group of shareholders asked the court for a hearing on appointment of an examiner on April 13.
The case is In re Visteon Corp, U.S. Bankruptcy Court, District of Delaware, No. 09-11786.
(Reporting by Thomas Hals, editing by Dave Zimmerman)
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