Dana, Appaloosa enter into confidentiality agreement

By Lisa Kerner

Charlotte, N.C., July 23 - Dana Corp. investor Appaloosa Investment LP entered into a confidentiality agreement with the company on July 21 in order to receive information, according to a schedule 13D filing with the Securities and Exchange Commission.

Appaloosa, with a 7.98% stake in Dana, believes it has a materially superior proposal to that of Centerbridge Capital Partners, LP.

Dana and Centerbridge have extended the deadline to sign their investment agreement to July 23, from July 19.

As previously reported, Appaloosa believes Dana's proposed transaction with Centerbridge and various unions is structured "to effectively preclude competing proposals."

Appaloosa said its proposal gives creditors full recovery on their claims while providing a "meaningful" return to shareholders and also "ensures that management will be accountable to stakeholders on a going-forward basis."

Under the Centerbridge investment agreement, Centerbridge will purchase up to $500 million of convertible preferred stock of the reorganized Dana. In addition, it will facilitate an additional investment of up to $250 million in convertible preferred stock.

Dana, a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3, 2006 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 06-10354.

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