UPDATE 1-Visteon safe from competing reorganization plans

* Company maintains control of bankruptcy

* Shareholders wanted to propose competing plan

WILMINGTON, Del., May 12 (BestGrowthStock) – A bankruptcy court
judge on Wednesday gave auto parts maker Visteon Corp
(VSTNQ.PK: ) the continued exclusive right to propose a plan of

Shareholders opposed the request and used the hearing to
attack the company’s proposed reorganization and argued for the
right to put forward their own plans.

Under the company’s plan, bondholders will have the
opportunity to buy $1.25 billion in stock in the reorganized

That money, along with new debt, would be used to pay off
the company’s secured lenders. Equity holdings would be wiped

“Lifting exclusivity will not accomplish anything,” said
Christopher Sontchi, the Delaware bankruptcy court judge.

Martin Bienenstock, an attorney with law firm Dewey &
LeBoeuf, which is representing an ad hoc group that owns about
12 percent of Visteon’s stock, said the company’s bonds are
trading at above par, despite the company’s argument the plan
only pays bondholders 8 cents on the dollar.

“There’s something very wrong here,” Bienenstock told the

He said the sophisticated investors who have gone over
Visteon’s numbers realize the plan will pay them a full
recovery on the bonds plus a premium, which explains the
trading levels of the bonds.

“I understand why you’re upset,” said Sontchi. “That’s not
a reason to terminate exclusivity.”

Over the past year, Visteon, a former unit of Ford Motor Co
(F.N: ), has been overhauling its operations as well as its
balance sheet, which was burdened with $5.3 billion in debt
when it filed for bankruptcy.

Visteon’s stock has risen from less than 2 cents per share
in December to more than $2 per share earlier this month.

The Van Buren Township, Michigan-based company reported
first quarter net income of $233 million, up from $2 million a
year earlier. Sales rose to $1.85 billion from $1.3 billion a
year earlier.

Wednesday’s hearing was adjourned until 2:30 p.m. When it
reconvenes, the judge will consider a request to appoint an
official committee of shareholders and a request to appoint an

Visteon shares were up 6.5 percent at $1.65 in midday pink
sheet trading.

The case is In re Visteon Corp, U.S. Bankruptcy Court,
District of Delaware, No. 09-11786.

Stock Market Investing

(Reporting by Tom Hals; editing by Andre Grenon)

UPDATE 1-Visteon safe from competing reorganization plans