Chassix Negotiating Prearranged Bankruptcy Filing

By Matt Jarzemsky and Mike Spector 

Chassix Inc., a supplier of steering knuckles, control arms and brake components to large auto makers, is working to finalize a restructuring plan with creditors and seek bankruptcy protection as soon as next week, said people familiar with the matter.

The Southfield, Mich., company, owned by private-equity firm Platinum Equity LLC, is negotiating a prearranged bankruptcy plan that would hand ownership stakes to creditors in exchange for forgiving debt and rework contracts with big auto makers including General Motors Co. and Ford Motor Co., the people said. The company aims to have the plan in place before a bankruptcy filing with a goal of streamlining its trip through court.

Chassix, which employs more than 4,000 people world-wide, is in discussions with banks and bondholders for more than $200 million in financing that would help it keep operating during bankruptcy proceedings, some of the people said. The company hopes to finalize a restructuring deal by March 4, when a grace period on a skipped $17 million debt payment expires, the people said. Overall, Chassix is looking to restructure about $525 million in bond debt, they added.

The discussions are fluid and the contours of the deal could change, people familiar with the talks said. A deal and subsequent bankruptcy filing isn't assured, especially given the array of parties involved, they said.

Chassix in a statement said it is "actively engaged in constructive discussions with certain of our lenders and noteholders, along with our major customers, to develop a comprehensive plan" intended to improve the company's finances. The company said it continues to operate normally and deliver parts to customers.

Write to Matt Jarzemsky at [e-mail] and Mike Spector at [e-mail]

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