With over $1.1 billion in debt, Cooper-Standard Automotive filed for bankruptcy on August 3, 2009 in the United States Bankruptcy Court for the District of Delaware. Based in Novi, Michigan, Cooper labels itself “a leading global manufacturer of fluid handling, body sealing, and noise, vibration and harshness control components … for use in passenger vehicles.” (See Cooper’s Declaration in Support of Chapter 11 Petitions).
Like with many of the “mega” bankruptcy cases filed in Delaware, Cooper filed several “first day” motions contemporaneous with filing its bankruptcy petition (you can read Cooper’s Voluntary Petition for Bankruptcy here). Through its first day motions, Cooper seeks authority from the Bankruptcy Court to allow it to incur $200 million in bankruptcy financing. In order to insure continued operations at Cooper’s seventy-eight manufacturing and design centers worldwide, Cooper also filed a motion seeking authority to pay employee wage and benefit obligations. Certain vendors of Cooper will benefit from the company’s motion to pay the pre-bankruptcy claims of vendors, shippers and other suppliers.
The Debtors’ Financials
According to Cooper’s Petition for Bankruptcy, the company’s ten largest unsecured creditors are as follows:
- Senior Subordinated Notes Due 2014 … $313 million;
- Senior Notes Due 2012 … $200 million
- State of Ohio EPA … $2.7 million
- Robert Bosch LLC … $713,782
- Gil-Mar Manufacturing … $477,815
- Summit Metals … $449,326
- EMS Chemie NA … $448,778
- Evonik Degussa Corp. … $437,456
- TSM Corporation … $395,688
- Premier Tool & Die … $375,451
According to its Declaration, Cooper’s earnings (not sales) in 2008 were $218 million, an 8% drop compared to 2007 earnings of $285 million. The company admits in court papers that the drop in production in the auto industry left Cooper “overleveraged.” Cooper initially sought to restructure outside of bankruptcy. In the year prior to bankruptcy, Cooper reduced its workforce by 1,300 salaried employees. To reduce its debt load, Cooper hired Lazard to assist in negotiations with its lenders. Cooper’s lenders agreed to a forbearance agreement in July and extended the agreement through August 14, 2009. During these negotiations, Cooper and its lenders agreed to enter into debtor in possession financing whereby the lenders agreed to provide a “superpriority senior secured postpetition credit facility.”
This bankruptcy proceeding is filed under the caption “Cooper-Standard Holdings, Inc., et. al.” As stated in the Declaration, CSA Acquisition Corp. was formed in 2004 as a Delaware corporation through a joint venture between The Cypress Group LLC and Goldman Sachs. CSA Acquisition then entered into a stock purchase agreement with Cooper Tire & Rubber Company and Cooper Tyre & Rubber Company UK Limited. The venture purchased Cooper for $1.165 billion in cash.
This bankruptcy proceeding is before the Honorable Peter J. Walsh, former Chief Judge of the Delaware Bankruptcy Court.