On Friday, March 3, 2006, Dana Corporation and certain of its affiliated companies (collectively, “Dana") filed for protection under Chapter 11 of the Bankruptcy Code in New York. None of Dana's foreign incorporated affiliates are included in this bankruptcy petition and as such, any transaction with such affiliates should continue in the normal course. However, as a result of the bankruptcy filing, an automatic stay is in effect prohibiting creditors from seeking to take action to collect any amounts due to them from Dana which arose prior to the filing of the bankruptcy petition.
If you are a Dana supplier who has shipped goods which were received by Dana within 45 days prior to the Bankruptcy filing, you should consider submitting a reclamation demand in order to recover possession of your products, or, at Dana's option, receive a higher priority administrative claim as to those goods when compared to a typical unsecured claimant thereby increasing the likelihood of receiving payment. In order to have the court consider such a demand, you must submit the demand in writing, no later than March 23, 2006; but it is advisable to do so earlier, if possible. We would be happy to assist you in analyzing your claim and preparing and filing a proper reclamation demand.
As part of court orders entered shortly after the filing of the case, the Bankruptcy Court granted Dana the discretion to pay certain “essential suppliers"--to be determined by Dana--all or some of the pre-petition amounts due in exchange for an agreement to, among other things, continue supplying in accordance with similar terms.
Please note that the filing of the bankruptcy petition by Dana does not necessarily relieve you from the agreements that you have with Dana. You may have other options available to you that may minimize your company’s exposure under these proceedings; however, this would require a complete review of your agreements with Dana.