Monday, June 1, 2009

Lear Chooses Not To Pay Bond Interest, Stock Shoots Higher

When a stock goes up by about 10% on a bankruptcy preannouncement, there is nothing much more to be said. In a press release earlier, Lear, critical D-3 parts supplier, and target of a Carl Icahn takeover attempt in 2007 (I bet shareholders who voted down that $37.25 offer back then are feeling really retarded right now), has announced that, just like all other nationalized car companies, it has decided it feels no need to pay its bonds and has entered a 30 day grace period (if the payment has still not been made at the end of the period, add one more company to Taxpayer Capital LP's portfolio).
"The Company is utilizing the 30-day grace period applicable to the interest payments while it continues discussions regarding a capital restructuring with its lenders and others. Under the applicable indentures relating to the Senior Notes, the use of the 30-day grace period does not constitute a default that permits acceleration of the Senior Notes or any other indebtedness."
And, as is the case in bizarro world, the stock is shooting straight up. Sphere: Related Content
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