Venture Holdings Company's bank debt dropped almost 10 points following a bank meeting two weeks ago, with market players suggesting that the dip was caused by squabbling between different parties involved in the company's bankruptcy proceedings. The loan was said to have traded in the 62 range, down from the 70 context. In response to a question about the drop in the loan value, James Butler, Venture Holdings' cfo and general counsel, confirmed that the drop in levels was consistent with what the company was hearing. By midweek the loan was offered at 61, a dealer said. Butler declined to comment on the negotiations surrounding the bankruptcy proceedings, other than to say Venture Holdings is continuing talks with the parties involved.
Butler identified the major constituencies in the case as the company's banks, its unsecured creditors and Larry Winget, Venture Holdings' founder. Bank One is the administrative agent on the debt. "There are discussions ongoing with Mr. Winget right now--important discussions from the point of view of the creditors," said an attorney involved in the case. An investor explained that Winget owns the company from an equity point of view. He also owns ancillary assets that were not a part of the collateral package that the bank group wants, the investor added. Calls to Winget were not returned by press time.
Venture Holdings ran into trouble after certain managing directors from its German subsidiaries filed for the institution of preliminary insolvency proceedings under the German Insolvency Act last May. In October, the German Municipal Court Freiburg commenced formal insolvency proceedings against Venture Holdings' German subsidiaries. The company filed for bankruptcy on March 29 after liquidity was harmed by these events.