Tower Automotive looks to increase potential plan investor, lender expense limit to $2 million

By Caroline Salls

Pittsburgh, Dec. 7 - Tower Automotive, Inc. requested court approval to increase the limit on reimbursement expenses being paid to potential plan of reorganization investors and lenders to $2 million from $1 million, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, since the original order was entered, several parties have performed substantial due diligence and have incurred significant fees.

Most significantly, Tower said it has been in intense negotiations with a group of its current senior bondholders regarding a commitment letter and term sheet for a backstop to the plan's equity investment.

Since the equity investment being sought by the company is in the range of hundreds of millions of dollars, Tower said the parties must perform substantial due diligence to evaluate the investment.

As a result, the fees being incurred by the potential investors are collectively reaching the $1 million cap.

In addition, Tower said it is negotiating an extension or refinancing for its debtor-in-possession facility, which is set to expire on Feb. 2, and other potential lenders are also beginning to incur necessary due diligence fees.

A hearing is scheduled for Dec. 20.

The Novi, Mich.-based auto parts maker filed for bankruptcy on Feb. 1, 2005. Its Chapter 11 case number is 05-10578.

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