27 Automotive Suppliers File Chapter 11 Bankruptcies in 2009; End of Year Status Summary; Likelihood of Bankruptcy Preference Recovery

Pressures in the global automotive industry forced 27 FN1 automotive parts and component manufacturers and 2 automakers to seek Chapter 11 bankruptcy protection in 2009.  The number of filings is only the headline of the story.  While estimated trade creditor distributions on prepetition claims swung the spectrum of 100% to 0%, estimated recoveries of less than 2 percent predominate.  And more trade creditor pain looms in several bankruptcies, as bankruptcy preference action recoveries are either included in liquidation budgets, are necessary to avoid administrative insolvency or are likely to be sought by plan administrators and liquidation trustees.

This article provides a comprehensive list of the 27 automotive supplier Chapter 11 bankruptcies in 2009, together with status at the end of 2009, estimated trade creditor recoveries and the potential for avoidance actions.

Visteon Bankruptcy – Largest Unsecured Bankruptcy Creditors

Visteon Corp. has filed a consolidated list of the 30 largest unsecured creditors of the Visteon Corp. and affiliated Debtors (the “Top Unsercured Creditor List”) in lieu of a separate list for each of the Debtors. The amounts owed to each of the unsecured suppliers is listed as trade debt. Visteon’s list is heavily populated with providers of electronic components and plastic compounds.

Visteon Bankruptcy – First Day Motions

Visteon Corp. has filed 13 first day motions and the Affidavit of Willaim G. Quigley, III, Chief Financial Officer in Support. The motions include one critical vendor motion to authorize payment of certain pre-petition claims of suppliers.  (Item 4 Below) The first day motions are:

Visteon Bankruptcy – Debtors and Petitions

Visteon Corporation and 30 affiliated entities (”Debtors”) filed a petitions in Bankruptcy Court for the District of Delaware for relief under chapter 11 of title 11 of the United States Code.  Contemporaneously with the filing of their petitions, the Debtors filed a motion requesting that the Court consolidate their chapter 11 cases for administrative purposes only under the Visteon Corporation case number 09-11786. The following are the names, case numbers and copies (as available ) of the bankruptcy petitions.