NOVI, Mich. - Tower Automotive announced Tuesday that it has filed for Chapter 11. The filing also includes a previously announced sales agreement for a substantial portion of Tower’s assets to Cerberus Capital Management, L.P.
The filing provides for payment in full of secured claims, including obligations under Tower's Debtor-in-Possession (DIP) credit facility and second lien loan facility, as well as payment in full of administrative and priority claims; assumption of the company's pension plan; and partial recovery for certain unsecured creditors.
The company had implemented a restructuring plan that included the close or sale of 16 manufacturing plants and the consolidation of production into existing facilities; settlement negotiations with 10 U.S.-based labor unions; the sale of non-core business and diversification of its customer base with international automakers.
The proposed sale is subject to higher bids. Competing bids must be submitted by June 20, 2007. If bids are received, the company will hold an auction on June 25, 2007 to determine the best and highest bid. Tower would then ask the bankruptcy court to approve the transaction, with a closing expected by July 31, 2007.
Tower Automotive designs and produces vehicle structural components and assemblies for use by automotive OEMs.