HAYES LEMMERZ - CASE STUDY

Industry: Auto Parts and Equipment

Transaction Type: Chapter 11 Reorganization

COMPANY DESCRIPTION

Hayes Lemmerz International, Inc. ("Hayes Lemmerz") manufactured and supplied aluminum and steel wheels and automotive brake products to original equipment manufacturers of passenger cars, light trucks, and commercial highway vehicles.

SITUATION OVERVIEW

In light of global economic conditions and the decline of the auto industry, Hayes Lemmerz International, Inc. filed for chapter 11 bankruptcy in the District of Delaware on May 11, 2009. 

EMERALD SOLUTION

In connection with the chapter 11 filing, Emerald professionals were retained as the exclusive financial advisor to the Official Committee of Unsecured Creditors of Hayes Lemmerz, focusing on the following action items:

• Analyzing the initial proposal put forth by the Company, as well as the overseas guaranties associated with the unsecured debt
• Demonstrating that the unsecured creditors would be better off in a liquidation than by losing the value in the previously unencumbered overseas assets
  

TRANSACTION RESULTS

As a result of Emerald professionals’ involvement, the following outcomes were successfully achieved:

• Emerald professionals blocked the Roll-Up DIP lenders from acquiring a security interest in the previously unencumbered overseas assets, while the New Money DIP Lenders received a security interest subject to a marshalling provision.
• The unsecured creditors received a recovery equal to $5.0 million in cash, 3.0% of the reorganized Company, and warrants for 10% of the Company, representing an improvement of 3,400% over the Debtors’ original proposal.

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