Hedge Funds Say Refinancing Is Unen-Dura-ble

Nov 15 2006 | 11:03am ET

Hedge funds claiming control of most of Dura Automotive System’s second-lien debt are crying foul at the Detroit auto-parts supplier’s debt refinancing plan.

Dura, which filed for bankruptcy protecting last month, has proposed a $300 million debtor-in-possession financing plan to pay off $125 million in first-lien debt, leaving it with about $175 million in financing. It’s that latter part that worries the second-lien hedge fund group, which includes Contrarian Funds, D.E. Shaw & Co. and Merrill Lynch Capital, because they see it as an added layer of debt between them and their collateral: the company’s $2 billion in assets.

In a filing Monday, the hedge fund committee said it would seek the continuation of the “adequate protection” package first- and second-lien creditors negotiated prior to the bankruptcy filing, guaranteeing monthly interest payments, as well as footing the bill for legal and financial advisors.

Both the DIP plan and the hedge fund motion are set for review on Monday.


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of