The bankruptcy of another substantial automotive supplier (the fifth in 2009) came with no first day motions that might help the supplier base. However, General Motors Corporation, Ford Motor Company and Chrysler, LLC once more have stepped up with DIP financing to keep a supplier operating while the parts are resourced.
Articles tagged with: dip financing
Contech Confirms there will be No Money for Unsecureds
Contech U.S. LLC and two affiliates, MAG Contech, LLC and Contech, LLC filed bankruptcy in Michigan on January 30, 2009 – another victim of the automotive sector downturn. The most unique aspect of the case has been the willingness of 5 automotive customers (Delphi, Ford, BMW, Linamar and Automotive Components Holdings) to provide $7,200,000 DIP financing to keep Contech manufacturing components until a buyer can be found. For the suppliers to and other unsecured trade creditors of Contech, there never seemed to be much to try and salvage. This was confirmed in a March 26, 2009 filing by Contech.
Fluid Routing Solutions Bankruptcy – Automakers are Paying Attention; DIP Financing Approved;
Feb. 10, 2009 – This case already is being closely followed by the automaker customers of Fluid Routing Solutions. Three notices of appearance have been filed – counsel to Ford Motor Company, counsel to Toyota Motor Engineering & Manufacturing North America, Inc. and counsel to Chrysler LLC. An even stronger demonstration of automaker interest is the attendance at Monday mornings’ hearing (February 9, 2009) of counsel for both Chrysler and Toyota.
We would expect that the automakers do not want to see a repeat of the disaster that occurred with Cadence Innovation LLC, where Chrysler and GM ended up in a race to see who could pull their tooling first, and Cadence was left with no alternative but a straight liquidation. While they would never admit it, the automakers are probably monitoring each other as closely as they are monitoring Fluid Routing Solutions to make sure that no one makes any sudden moves.