Tower Automotive to sell its assets, has plants in Auburn and Kendallville

Greater Fort Wayne Business Weekly

Novi, Mich.-based Tower Automotive has filed a restructuring term sheet with the U.S. Bankruptcy Court for the Southern District of New York, in which the company says it will sell substantially all of its assets through a Chapter 11 bankruptcy plan.

Cerberus Capital Management LP would designate which funds and accounts would receive proceeds from the sale.

The proposed transaction would provide for payment in full of obligations under the company's debtor-in-possession credit facility and second-lien loan facility, the assumption of the company's pensions and the recovery of unsecured creditors, the company said in a statement. The company's unsecured creditors committee supports the transaction and has signed the term sheet.

Tower has operations in Auburn and expects to close its plant in Kendallville in May, which will result in 120 layoffs.

The term sheet anticipates Tower will file a Chapter 11 plan by April 20. The sheet also specifies a marketing process, in which qualified parties can submit competing bids by June 15. If competing bids are received, Tower would conduct an auction June 21. The company then would ask the court to confirm the bankruptcy plan and approve a transaction on June 22, with a closing date of July 31.