Dura finds mistake in 2006 10-K; does not affect balance sheet or operating statements

By Caroline Salls

Pittsburgh, Dec. 4 - Dura Automotive Systems, Inc. has uncovered errors in a portion of its previously filed 10-K for the year ended Dec. 31, 2006, stemming from a footnote included in the consolidating guarantor and non-guarantor financial information portion of the report, according to an 8-K filed with the Securities and Exchange Commission.

The company said it will file an amended 10-K/A for the year ended Dec. 31, 2006 as soon as possible.

Dura said the corrections will have no impact on the company's consolidated balance sheets, consolidated statements of operations, consolidated statements of stockholders' investment or consolidated statements of cash flows for any previously reported period.

According to the 8-K, direct wholly owned subsidiary Dura Operating Corp. has 8 5/8% senior notes and 9% senior subordinated notes outstanding, and the obligations on these notes are guaranteed by Dura and some of its subsidiaries.

As a result, under Rule 3-10 of Regulation S-X, the company is required to include a footnote in its consolidated financial statements that details condensed consolidating financial information for Dura Operating, as well as the companies that have guaranteed the notes and the companies that have not guaranteed the notes.

This information must include balance sheet, statements of operations and cash flow information.

However, Dura discovered the errors related to the consolidating guarantor and non-guarantor financial information during its preparation of the 10-Q for the quarter ended April 1, 2007.

The company said the errors mostly relate to the misclassification of operations between Dura Operating and the guarantors; the improper accounting for some Dura Operating equity transactions; and the failure to correctly record reclassifications and allocations related to intercompany transactions.

In addition, Dura said its management has found a material weakness in its financial reporting controls related to the preparation and review of the company's consolidating guarantor and non-guarantor financial information.

Dura, a Rochester Hills, Mich.-based automotive parts maker, filed for bankruptcy on Oct. 30, 2006 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 06-11202.

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