WILMINGTON, Del., June 8 (Reuters) - Auto parts maker Holley Performance Products Inc received court approval for its reorganization, clearing the way for the company to exit bankruptcy for the second time in less than three years.
The reorganization will turn the company’s equity over to the holders of the company’s $57.5 million of outstanding secured notes and wipes out its stock.
However, the ownership appears unlikely to change dramatically because holders of the secured notes also held the vast majority of the company’s equity before it filed for bankruptcy, according to court documents.
The secured noteholders had swapped some of their debt for equity when Holley emerged from bankruptcy in March 2008.
Holders of $20.3 million in claims stemming from the company’s 2008 exit financing will be paid in cash while $11 million in general unsecured claims will get no recovery.
The privately held company, which is a major supporter of drag racing and NASCAR racing, said in court documents that sales fell to $90.2 million in 2009 from $112.0 million in 2008 when it came out of bankruptcy.
After Holley’s last bankruptcy, the company planned to focus on expanding its emissions control business. However, that business soon went into decline when its major customer, Caterpillar Inc, discontinued a line of truck engines.
The Bowling Green, Kentucky-based company was founded more than 100 years ago and its brands include Flowtech, Weiand, Nitrous Oxide Systems and Hooker. It employs about 300.
The case is In re Holley Performance Products Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-13333. (Reporting by Tom Hals, editing by Dave Zimmerman)