Meridian Automotive emerges from Chapter 11 with $167 million exit facility

By Caroline Salls

Pittsburgh, Dec. 29 - Meridian Automotive Systems, Inc. emerged from Chapter 11 bankruptcy Friday when its plan of reorganization took effect, according to a company news release.

In connection with its emergence from Chapter 11, Meridian has entered into a $167 million exit financing facility with Deutsche Bank.

The plan of reorganization was confirmed on Dec. 6.

"This is an exciting day for Meridian Automotive Systems," president and chief executive officer Richard E. Newsted said in the release.

"We are pleased to have successfully completed our restructuring and to emerge as a stronger company with significantly less debt and increased liquidity, two factors which will contribute to our long-term success in the automotive industry."

As previously reported, pre-bankruptcy first- and second-lien lenders will receive 100% of the new common stock in the reorganized company.

Treatment of creditors under the plan will include:

• Holders of other secured claims will receive reinstatement of their claim or the collateral securing the claim;

• Holders of pre-bankruptcy first-lien claims will receive either a share of $18 million in cash and $80 million in new notes, as well as 95.5% of the new common stock or a share of new notes from a $98 million term loan and 95.5% of the total shares of new common stock in the reorganized company, depending on the closure timing on the sale of the company's Fowlerville, Mich., facility.

Each pre-bankruptcy letter of credit will also be returned to the issuer undrawn and canceled;

• Holders of pre-bankruptcy second-lien secured claims will receive their share of 4.5% of the new common stock in the reorganized company, their share of new warrants and their share of the pre-bankruptcy second-lien claim trust interests, which will entitle holders to a share of the net litigation trust recoveries;

• Holders of general unsecured claims will receive their share of the general unsecured claims trust interests, which will entitle the holder to a share of the net litigation trust recoveries;

• Holders of pre-bankruptcy subordinated claims, as well as pre-bankruptcy Meridian interests and intercompany claims, will receive no distribution.

Meridian, a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers, filed for bankruptcy on April 26, 2005 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 05-11168.

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