Dana Corporation in the U.S. files for Chapter 11 reorganization

TOLEDO, Ohio, 6 March 2006. Dana Corp. has announced that in order to address financial and operational challenges that have hampered its performance, the company and 40 of its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Dana's European, South American, Asia- Pacific, Canadian, and Mexican subsidiaries are not included in the Chapter 11 filing and are operating as normal.

Mar 6th, 2006

TOLEDO, Ohio, 6 March 2006. Dana Corp. has announced that in order to address financial and operational challenges that have hampered its performance, the company and 40 of its U.S. subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Dana's European, South American, Asia- Pacific, Canadian, and Mexican subsidiaries are not included in the Chapter 11 filing and are operating as normal. The filings were made Friday in the U.S. Bankruptcy Court for the Southern District of New York.

To fund its continuing operations during the restructuring, Dana has secured a $1.45-billion debtor-in-possession (DIP) financing facility from Citigroup, Bank of America, N.A., and JP Morgan Chase Bank, N.A. Subject to court approval, the DIP credit facility, which replaces the company's previous $400 million revolving credit facility and $275 million receivables securitization facility, will be used for the company's normal working capital requirements, including employee wages and benefits, supplier payments, and other operating expenses during the reorganization process.

Dana's revenues have been declining, resulting from the decreasing market share and production levels of its largest domestic customers, along with increases in commodity and energy prices.

As a result, the company concluded, after thorough consultation with its advisors, that its interests and the interests of its creditors, employees, customers, suppliers, and the communities in which it operates would be best served by reorganizing under Chapter 11 of the U.S. Bankruptcy Code.


The company plans to proceed with its divestiture and restructuring plans, which include the sale of several non- core businesses and the closure of several facilities, and shift production to lower-cost locations.

Dana has filed "First-Day Motions" in the Bankruptcy Court in New York designed to ensure that the company's business continues to function without disruption. The court filings are intended to ensure that the company can continue to pay its employees and suppliers and maintain uninterrupted delivery of products and services to its customers.

Dana reported total assets of approximately $7.9 billion and total liabilities of approximately $4.7 billion, on a consolidated basis, as of September 30, 2005.

Dana Corporation designs and manufactures products for major vehicle producers worldwide. A supplier of drivetrain, chassis, structural, and engine technologies, Dana employs 46,000 people in 28 countries. Based in Toledo, Ohio, the company reported sales of $9 billion in 2004.

More in Home