Friday, September 18, 2009 8:51:25 AM
I do not like in the filing how it says Lear equity holders are "deemed to reject", however the Wall St. Journal said creditors would receive a large portion of the common and all the new preferred, but not all the common.
There is going to be value here - i don't think anyone except insiders to the court know how much they are working on.
If a reorganized Lear is worth say 2.5 billion, just 1% of that is 25 million on 77 million shares = .32/sh which is where we are.
LEARQ is in all likelyhood not going to go lower than this.
On Friday, auto-parts supplier Lear Corp. (LEARQ) will ask the New York bankruptcy court for permission to send its Chapter 11 plan to creditors for a vote.
Under Lear's Chapter 11 restructuring plan, the lenders would forgive their debt in exchange for a new $600 million term loan plus all of a reorganized Lear's preferred stock, valued at $500 million, and a substantial share of the company's new common stock.
Unsecured creditors, including bondholders owed $1.3 billion, would receive a chunk of Lear's common stock plus warrants allowing them to purchase an additional 15% of the company's shares. They are expected to recover about 43% on their claims.
Lear last month filed court documents indicating that its creditors would recover far less in a liquidation. According to an analysis prepared by Alvarez & Marsal, lenders would recover only 36% on their $2.3 billion in claims if the Southfield, Mich., company were to liquidate.
At Friday's hearing, Lear will ask the court to approve an outline of the plan, called a disclosure statement. The court must approve the statement before creditors can begin voting on the plan.
Lear, which makes automotive seats and electronics, filed for Chapter 11 bankruptcy protection on July 7.
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