Auto parts-maker Dura Automotive Systems LLC has filed for bankruptcy protection for its U.S. operations, saying that it is looking for a buyer to bail out its debt-laden business managed by turnaround executive Lynn Tilton, WSJ Pro Bankruptcy reported The business has been up for sale since last year, but Tilton, who says she is the majority owner, intends to be the lead bidder at a bankruptcy auction. She plans to buy Dura from herself unless rival bidders step forward. New court papers say that Tilton wants the right to credit-bid at the auction instead of bidding with cash. Dura owes her Ark II about $27 million; however, she has proposed bankruptcy financing that would elevate that loan to top priority, and add additional funds, which would also be valuable currency at an auction. The bankruptcy filing sets up a clash between Tilton and the Zohar funds, investment vehicles that are Dura’s largest senior lender, owed about $105 million. Both the Zohar funds and Tilton claim to be majority owners of the company.
