New York, December 26, 2007—Shearman & Sterling’s Bankruptcy & Reorganization Group represented Remy International, Inc., a leading global manufacturer and re-manufacturer of aftermarket auto parts, in connection with its prepackaged chapter 11 restructuring. While other large companies in this sector have languished in bankruptcy for many months, Remy is the only tier-one auto supplier to consummate a prepackaged chapter 11 and emerge from bankruptcy protection in less than two months.
Remy filed for bankruptcy protection on October 8, 2007 and contemporaneously filed a prepackaged plan of reorganization. The plan, which enjoyed the near unanimous support of Remy’s noteholders, was confirmed by the bankruptcy court in a mere 43 days and became effective on December 6, 2007.
The prepackaged plan, which de-levered Remy’s capital structure by approximately $360 million, involved: a syndicated $330 million first and second lien exit financing led by Barclays Bank PLC; a successful $85 million rights offering; the conversion of $145 million of senior notes into $100 million of third-lien PIK notes and approximately $65 million of cash; and the conversion of approximately $315 million of subordinated notes into 100% of Remy’s reorganized equity.
In addition to rationalizing Remy’s balance sheet, the restructuring involved the renegotiation of Remy’s long-term supply arrangements with General Motors Corporation, a comprehensive settlement agreement with Remy’s majority shareholder, Court Square, in order to preserve tax attributes and the sale of one of Remy’s non-core businesses.
Remy is a leading global manufacturer and remanufacturer of aftermarket electrical components, original equipment electrical components, and aftermarket powertrain/drivetrain components for automobiles, light trucks, heavy duty trucks and other heavy duty vehicles.
Attorneys included partners Roger J. Baneman (NY-TX), Douglas P. Bartner (NY-BR), John Cannon (NY-ECEB), James S. Scott, Sr. (NY-CM), Lisa Jacobs (NY-CM) and Fredric Sosnick (NY-BR), counsel Joanna Shally (NY-LT), and associates Jill Frizzley (NY-BR), Justin Hewitt (NY-BR), Christopher S. Salmon (NY-CM), Randall Martin (NY-BR), Solomon Noh (NY-BR) and Garrett J. Dowd (NY-ECEB).