News (AP) - Bankruptcy court approves Visteon Chapter 11 plan

WILMINGTON, Del. (AP) -- A federal judge confirmed auto parts supplier Visteon's reorganization plan Tuesday, clearing the way for the company's emergence from bankruptcy. Visteon, a major supplier of parts to Ford Motor Co., said that it expects to emerge from Chapter 11 bankruptcy by Oct. 1. The company, based in Van Buren Township, Mich., filed its case in May 2009 as the auto industry was battered by sharply lower sales and the financial crisis. Visteon said it has significantly reduced its debt and restructured. The company's plan, approved by shareholders and creditors earlier this month, has now been confirmed by Judge Christopher Sontchi of the U.S. Bankruptcy Court. The plan gives bondholders a roughly 95 percent stake in the new company in exchange for buying back $300 million of stock, and raising another $950 million by backing a stock rights offering. But Visteon also had to work out an agreement over the health and life insurance benefits for more than 6,500 retirees. Company spokesman Jim Fisher said Visteon has agreed to make a payment of $11.5 million and $500,000 in attorney fees to retirees in return for termination of their benefits. Visteon had originally said it planned to terminate its retiree coverage when it emerged from bankruptcy. The IUE-CWA union, which negotiated the settlement with Visteon, said members above 65 as of April 1 will receive $2,000 while those under 65 will receive up to a maximum of $13,000. Retirees will also be able to extend their coverage with out-of-pocket payments. Visteon had also considered ending three of its four pension plans. But the Pension Benefit Guaranty Commission, the federal backstop for pensions, said that the plan approved Tuesday keeps the pension for 22,000 Visteon workers and retirees, and avoids adding $500 million to the PGBC's funding shortfall. Published: Thu, Sep 2, 2010

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