Dura looks to amend DIP to avoid potential negative covenant violations

By Caroline Salls

Pittsburgh, Dec. 14 - Dura Automotive Systems, Inc. requested court approval to amend its debtor-in-possession financing agreement to change some negative covenants, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Dura said it entered into an agreement with Johnson Controls and Bridgewater Interiors LLC in October, under which Johnson Controls Systems, Inc. granted favorable commercial terms adjustments to existing supply agreements in exchange for commitments from Dura to protect Johnson from supply disruptions.

According to the motion, the DIP amendments were negotiated to resolve issues related to the Johnson Controls agreement's potential impact on the security interests of Dura's post-bankruptcy secured parties.

Absent the amendment, Dura said the October Johnson Controls agreement could prompt violations to negative covenants contained in the DIP agreement.

Dura will pay $358,478 in amendment fees by Dec. 27.

A hearing is scheduled for Dec. 27.

Dura, a Rochester Hills, Mich.-based automotive parts maker, filed for bankruptcy on Oct. 30, 2006. Its Chapter 11 case number is 06-11202.

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