Southfield, MI, December 27, 2006--Automobile interiors company Collins & Aikman Corp. filed a revised plan to exit bankruptcy court protection, reflecting its decision to shut down rather than stay in business.
Collins & Aikman Corp. has no affiliation with C&A Floorcoverings.
Secured creditors and those holding administrative and priority claims will get back all the money they are owed, while shareholders will get nothing, according to the plan, filed Dec. 22 in U.S. Bankruptcy Court in Detroit. The company didn't say whether any other creditors, such as suppliers and unsecured bondholders, stand to receive anything.
The Southfield-based company announced last month it would sell its operations through the bankruptcy process. The company will hold auctions in which participants try to top minimum offers set by court-approved lead bidders. Under an earlier plan filed in August, the company planned either to reorganize itself as a stand-alone company or bundle many of its units for sale.
"The debtors recognized that operating their businesses based on the previous model was not a viable alternative," the plan said.
When it entered bankruptcy in May 2005, Collins & Aikman said it wanted to reorganize its operations and exit court protection. New managers hired to guide the company out of bankruptcy spent months studying the options before concluding the best way to repay creditors was to auction off assets, the plan said.
Since February 2005, five major U.S. auto-parts suppliers have sought bankruptcy court protection, citing cutbacks by America's three largest automobile makers, General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.
Collins & Aikman operates 45 North American plants and employs 12,000 workers. In March, billionaire investor Wilbur Ross bought the majority of the company's European operations.
On Dec. 13, the company announced that it had selected a lead bidder for its automotive carpet business.
The name of that bidder will be released in court documents as early as next month, the company
