The move was highly anticipated as Lear had defaulted on interest payments on bond debts last week and divulged its intention to seek bankruptcy protection.
The protection covers United States and Canada division. The company’s overseas production operations are not included.
According to documents filed with the U.S. Bankruptcy Court in the Southern District of New York, Lear revealed $1.27 billion in assets and $4.54 billion in liabilities.
The court has given approval to Lear to pay employees in the U.S. and spend the credit collected from lenders until it has access to $500 million bankruptcy loan.
Support from creditors
Hammered by economic downturn, Lear said that it has secured the support of its bondholders and creditors to move for protection in order to reorganize its ailing business.
Its creditors include Bank of New York, Carlyle High Yield Partners, Deutsche Bank AG, Merrill Lynch and Icahn Partners LP.
Bob Rossiter, chairman and chief executive officer, stated, “We are conducting business as usual and are very pleased to have received strong support from our lender and bondholder groups for our debt restructuring plan. We intend to proceed on an expedited basis and expect to submit the plan to the Bankruptcy Court within 60 days.”
Company’s operations
Lear is a main supplier to General Motors Corp. (GM), Ford Motor Co. and many foreign automakers.
It was a supplier to General Motors' pickup truck and SUV before its plant in Janesville was shut down due to GM ceasing pickup and SUV production.
The bulk of company’s domestic plants are situated in Michigan and Indiana.
Lear’s officials are expected to appear in court on Wednesday to get approval to pay the suppliers. By July 30, the company hopes to seek permission to borrow $500 million bankruptcy loan.
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