Visteon shareholders' requests for examiner, official committee denied

By Caroline Salls

Pittsburgh, May 19 - Visteon Corp.'s shareholders' motions for the appointment of an examiner and the appointment of an official equity committee for the company's bankruptcy case were both denied Wednesday by the U.S. Bankruptcy Court for the District of Delaware.

Visteon's informal shareholders committee said it wanted the court to appoint an examiner so that "the final Chapter 11 plan is based in reality."

The informal committee said Visteon's board has "repeatedly failed to act according to the requests of and in the best interests of the company's shareholders," seeking instead to "appease the secured claimholders through an unfair, unbalanced, and unlawful Chapter 11 plan and plan support agreement."

The committee wanted an examiner to conduct an investigation of several issues including whether:

• There is a superior Chapter 11 plan that pays creditors in full while providing a return for equityholders to the extent of the surplus;

• There is another legal plan more favorable to equityholders;

• The company has manipulated its accounting reserves to conceal additional profits and support a lower valuation of Visteon;

• Visteon's customer production schedules exceed the company's revenue and volume projections for the next three to five years and whether management's actions are consistent with its own revenue projections and industry projections; and

• Visteon has engaged in any communications with its customers regarding the subject of debt capacity and any third-party lender views of debt capacity.

Meanwhile, Visteon shareholders Cypress Management Master, LP, Lenado Capital Advisors LLC and Goshawk Capital Corp. asked the court to appoint an official committee of equity security holders, arguing that "there is equity value in the company that the debtors are trying to extinguish."

Visteon, a Van Buren Township, Mich., global automotive supplier, filed for bankruptcy on May 28, 2009. Its Chapter 11 case number is 09-11786.

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