By on December 17, 2009

The creditor lot is bigger...

The Freep reports that creditors in Visteon’s bankruptcy are investigating Ford’s relationship with its spun-off supplier, implying that the Blue Oval could be responsible for its financial downfall. The creditors have requested the release of documents relating to Ford’s 2000 spin-off of its parts maker, and financial transactions between the two firms since then. They’re hoping to show that Ford forced losses onto the supplier, possibly securing better claims for creditors. The creditor committee motion explains:

Since the spin-off transaction, there has been no semblance of arm’s length bargaining between Visteon and Ford. Ford appears to have utilized its insider status to control Visteon to Visteon’s detriment.

Because Ford is Visteon’s main lender, former parent and biggest customer, the creditor’s committee will use every instance of unfair negotiation to put their claims before Ford’s. That could force Ford to dig deep to protect its largest supplier even as other OEMs scramble to limit their exposure to the bankrupt firm. According to Crains Detroit, the major creditor concern is over the 2005 deal in which Ford regained ownership of 23 plants and about 18,000 hourly and 5,000 salaried employees from Visteon to form a new company, Automotive Components Holdings. The motion continues:

If, in fact, Ford parlayed its insider status to use Visteon as a cost center, structured the spinoff transaction to saddle Visteon with excessive liabilities, continued to siphon value from Visteon post spinoff and did not provide Visteon with reasonably equivalent value for the ACH assets, Ford should be held accountable

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3 Comments on “Visteon Creditors Blame Ford For Bankruptcy...”


  • avatar
    TrailerTrash

    Ya, like all the buxom women in Tiger’s address book should be held accountable for Tiger’s infidelity and loss of marketing money.
    Like my mother and her fantastic cooking should be held responsible for my inability to push away from the table today.

  • avatar
    detlump

    In a previous life, I definitely remember visiting the Village (sounds Prisoner-like, no?) and waiting forever in that lobby, after lucking out finding a place to park.  I always wondered why Visteon built that thing.  I think it was Delphi HQ-envy.  Of course, maybe they envied Delphi’s bankruptcy too.  Also reminds me of Lear’s mega expansion in Southfield which is largely empty these days.  If they had just saved the money how many jobs could have been saved?
    Someone once said beware the company building shiny new offices, they are not concentrating on the business at hand (or something like that).
    Oh well, the Village will make nice retirement condos I guess.

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