DETROIT (Sept. 1) — Automotive interiors specialist Collins & Aikman Corp. intends to exit Chapter 11 bankruptcy protection as a stand-alone company no later than February, according to a reorganization plan filed this week with the U.S. Bankruptcy Court.
Troy, Mich.-based Collins & Aikman is recapitalizing by exchanging its secured debt for common stock in the reorganized company.
The plan is subject to final approval by creditors and the court. Potential buyers can step forward any time before that approval to make a bid for the company.
Collins & Aikman is one of the largest interiors suppliers in North America. Its parts, which include cockpits, door trim and carpet, are on virtually every North American vehicle made by the Big Three auto makers.
The company has streamlined in Chapter 11 by closing plants, exiting the fabric business and selling its European operations. Its global sales in 2005 totaled $2.8 billion vs. $4 billion in 2004.
Confirmation of the reorganization plan still requires customer agreements, resolution of government investigations and labor agreement modifications, the company said in a release. The government investigations began after Collins & Aikman slid chaotically into Chapter 11 protection in May 2005 without cash or a survival plan. The company today has about 12,000 employees.
Under the announced reorganization plan, unsecured creditors who vote for the plan will receive warrants for their claims and interests in a litigation trust.