================================================================= MERIDIAN BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2005 (ISSN XXXX-XXXX) April 27, 2005 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- MERIDIAN BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Kenneth Rae V. Bramida, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of MERIDIAN BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO MERIDIAN BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF MERIDIAN AUTOMOTIVE SYSTEMS [00002] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00003] MERIDIAN AUTOMOTIVE SYSTEMS CHAPTER 11 DATABASE [00004] LIST OF MERIDIAN AUTO'S 30-LARGEST UNSECURED CREDITORS [00005] S&P CUTS MERIDIAN'S CREDIT RATING TO D [00006] DEBTORS' MOTION TO PAY UP TO $16 MIL. TO CRITICAL VENDORS KEY DATE CALENDAR ----------------- 04/26/05 Voluntary Petition Date 05/16/05 Deadline to provide Utilities with adequate assurance 05/26/05 Deadline for filing Schedules of Assets and Liabilities 05/26/05 Deadline for filing Statement of Financial Affairs 05/26/05 Deadline for filing Lists of Leases and Contracts 06/25/05 Deadline to make decisions about lease dispositions 07/25/05 Deadline to remove actions pursuant to F.R.B.P. 9027 08/24/05 Expiration of Debtors' Exclusive Plan Proposal Period 10/23/05 Expiration of Debtors' Exclusive Solicitation Period 04/26/07 Deadline for Debtors to Commence Avoidance Actions Organizational Meeting with UST to form Committees First Meeting of Creditors pursuant to 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO MERIDIAN BANKRUPTCY NEWS ----------------------------------------------------------------- MERIDIAN BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceedings. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of MERIDIAN BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) MERIDIAN BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceeding. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of MERIDIAN BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF MERIDIAN AUTOMOTIVE SYSTEMS ----------------------------------------------------------------- Meridian Automotive Systems, Inc. 550 Town Center Drive, Suite 475 Dearborn, Michigan 48126 Telephone (313) 336-4182 Fax (313) 253-4026 http://www.meridianautosystems.com/ Meridian Automotive Systems is a leading producer and supplier to the North American automotive industry of front- and rear-end modules, bumper systems, exterior composite plastic modules, exterior structural components, interior components and modules, and exterior lighting components. Meridian supplies parts for 19 of the 20 best selling vehicles in North America and a significant number of other popular light trucks, sport utility vehicles, passenger cars, and class 8 heavy trucks produced by the major automotive original equipment manufacturers, including General Motors, Ford, DaimlerChrysler, Toyota, Honda, Subaru, Mazda, Mitsubishi, Freightliner and Volvo. Meridian has historically been the largest supplier of stamped steel bumper systems and roll-formed reinforcement beams to Ford for its light truck and SUV lines and of interior consoles to General Motors for its luxury SUV line. The Company operates 20 principal manufacturing facilities located in Indiana, Kansas, Louisiana, Michigan, New York, North Carolina and Ohio, as well as in Brazil, Canada and Mexico. The Company's foreign operations are conducted through independent business units under the direction of local management, and are separate and distinct from its U.S. operations. Meridian employs approximately 5,400 workers worldwide, of which 4,700 are in the U.S. Approximately 3,740 are hourly employees and 960 are full-time salaried employees. Meridian also contracts for approximately 350 temporary hourly positions. Some of the Hourly Employees are members of labor unions represented under separate collective bargaining agreements. Since its inception in 1997, the Company has not experienced any significant work stoppages and considers its relations with its employees to be good. Meridian produces a broad range of products for the North American automotive industry, operating in three segments: FRONT- AND REAR-END MODULES 40% to 45% of Net Sales The Company's Front and Rear End Modules segment focuses on the design, engineering and manufacture of front- and rear-end modules and bumper systems. The Company designs, engineers and manufactures chrome-plated and painted stamped steel bumpers, steel roll-form beams, and energy absorbing foam and plastic fascias, all of which are integrated into the front- and rear-end modules and bumper systems that the Company produces. The Company believes that it is one of the largest manufacturers of front- and rear-end modules and bumper systems in North America. The key vehicle platforms for this segment of the Company's manufacturing operations include the Ford F-Series trucks and the Expedition, Ranger, Taurus, Focus, Mercury Sable and Lincoln Navigator passenger car and SUV lines. EXTERIOR COMPOSITES 25% to 30% of Net Sales The Company's Exterior Composites segment focuses on the design, engineering and manufacture of a wide variety of exterior and structural plastic composite components for light trucks, SUVs, passenger cars and heavy trucks. These components, which usually consist of a composite material that blends glass or other fibers and plastic resins, are used in applications like body panels, fenders, tailgates, midgates, step assists, tonneau covers, hood assemblies, grille opening reinforcements, pickup truck boxes, valve covers and structural reinforcements. Composite materials offer significant weight savings to OEMs, while providing a high degree of design flexibility for the Company, with low initial investment and tooling costs compared to other materials. The Company's composite materials capability has resulted in its significant participation in the manufacture of niche vehicles like Chevrolet Corvette, Dodge Viper, GM H2 Hummer, Cadillac XLR, Ford Thunderbird and Lincoln Aviator. INTERIORS AND EXTERIOR LIGHTING 25% to 30% of Net Sales The Company's Interiors and Exterior Lighting operating segment focuses on the design, engineering and manufacture of interior components and modules and exterior lighting components. The Company designs, engineers and manufactures interior trim components and modules, which are predominately manufactured through plastic injection molding. The Company's interior products include floor consoles, instrument panels, door panels, cupholders, glove boxes, ash trays and decorative trim panels. In addition, the Company designs, engineers and manufactures exterior lighting components, including tail lamps, park and turn lights, license plate lamps, signal lamps, fog lamps, and center high mount stop lamps. Key vehicle platforms for this segment include GM's luxury SUV line and DaimlerChrysler's minivan line. The Company has also historically manufactured a small number of composite products for companies outside the automotive industry. The North American automotive manufacturing market is primarily comprised of GM, Ford and DaimlerChrysler, which collectively represented approximately 69% of vehicle production in the North American market in 2004, according to Automotive News. In recent years, foreign automotive companies have increased their production in North America, and are expected to continue to do so. The Company currently supplies its products primarily to Ford, GM and DaimlerChrysler, and it has increased its efforts to expand its relationships with foreign automotive companies with manufacturing operations in North America. Currently, the Company supplies products to Toyota, Honda, Subaru, Mazda and Mitsubishi. Since 1997, when Ford was its only customer, Meridian has successfully diversified its customer base primarily through the implementation of an acquisition strategy which allowed the Company to acquire additional contracts and relationships with GM, Ford and DaimlerChrysler. In 2004, no single customer directly represented more than 39% of the Company's net sales. Meridian is the sole source supplier for many components and assemblies used in these major models in production today: Customer Vehicle Component or Assembly -------- ------- --------------------- Ford F-Series Truck Front Bumper System, Rear Bumper System-Styleside, Outer Fenders/Crew Cab and Outer Fenders/ Flareside, Rear Bumpers - Heavy Duty, Fan Shrouds, Rear Chrome Bumper Assembly, Rear Painted Bumper Assembly and Rear Bracket Expedition/Lincoln Front/Rear Bumper System, Navigator Fog Lamps, Front/Rear Isolators and Hitch Assembly Ranger/Mazda Pickup Front/Rear Bumper System, Skid Plate, Cross Car Beam and Splash Fenders Taurus/Mercury Sable Front/Rear Beam Assembly, Front/Rear Isolator and Wagon Load Floor Focus Front/Rear Beam Assembly, Front/Rear Isolator, Toe Impact, Spare Tire Bolster and Inserts Lincoln Aviator Grille Opening Reinforcement and Front Fenders Thunderbird Filler Panel and Front Impact Beam GM GMC Yukon/Chevrolet Console Compartment, Suburban/Cadillac Front Bumper Beam, Step Escalade/GMC Denali Assist, Roof Hitch Molding, Skid Plate and Upper/Lower Bezel Chevrolet Avalanche, Tailgate and Midgate Cadillac Escalade EXT Chevrolet Silverado Composite Pickup Truck Box, Roof Hitch Molding, Instrument Panel Cupholder Chevrolet Impala Console, Steering Column Filler, End Caps, Radio Trim Plate, and Rear Shelf H2 Hummer Hood and Fenders Cadillac XLR Door Panels Chevrolet Corvette Hood Assembly, Right Hand/Left Hand Door Assembly, Targa Hatch Surround, Decklid Assembly, Convertible Surround, Tonneau Assembly Right Hand/Left Hand Door Surround, Coupe Surround, Hatch Assembly, and Head Lamp Door DaimlerChrysler Minivan Removable Center Console, Underseat Cupholder, Instrument Panel Cupholder/Convenience Tray, Console Tray/Map, Interior Lighting and Smoker's Kit Dodge Viper Sheet Molded Composite Panels, Tail Lamps, License Lamps, Center High Mount Stop Lamps and Backup Light Toyota Sequoia Front Beam Assembly Tundra Front Beam Assembly Meridian's products require a variety of raw materials, including steel, resin, nickel and paint. The Company deals with a number of raw materials suppliers and brokers and limits its dealings to parties who have consistently delivered raw materials that meet the levels of quality and grade specified by the Company's OEM customers. In addition, in the process of manufacturing production line-ready parts, the Company purchases certain sub- components from manufacturers specified by the OEMs. The Company employs just-in-time manufacturing and sourcing systems to meet customer requirements for faster deliveries and to minimize the need to carry significant inventory levels. To date, the Company has not experienced any significant shortage of raw materials, and it normally does not carry inventories of raw materials or finished products in excess of those reasonably required to meet production and shipping schedules. The Company typically enters into arrangements with its OEM customers to supply the customers' requirements for particular vehicle platforms or models, rather than to manufacture a specific quantity of products. These arrangements typically have a duration equal to the life of the platform or model in question, which is usually three to ten years. The terms of these arrangements generally do not require the OEM customers to purchase any minimum number of products from the Company. Due to the lengthy process associated with obtaining awards of new business from the OEMs, a significant portion of the Company's sales are generated pursuant to arrangements entered into about two to five years before the Company begins to realize the revenues related to those arrangements. Most of the parts the Company produces have a lead-time of two to five years from product development to production. Corporate Structure Founded in 1978, Meridian's predecessor, American Bumper & Mfg. Co., was a supplier of stamped steel bumpers and roll formed reinforcement beams primarily to Ford. On April 30, 1997, a group of investors led by Windward Capital Associates, L.P. acquired approximately 74% of the outstanding stock of American Bumper through a leveraged recapitalization, and thereafter formed Meridian. Meridian Automotive Systems, Inc., is the ultimate parent company and sole shareholder of each of its first-tier domestic subsidiaries. Meridian is also the parent company and sole shareholder of American Bumper Foreign Sales Corporation, a Barbados corporation. Meridian Automotive Systems - Detroit Operations, Inc., a wholly owned subsidiary of Meridian, owns a 49% percent interest in Lorro, Inc., a Michigan corporation. Meridian's wholly owned subsidiary Meridian Automotive Systems - Composites Operations, Inc. is the parent company and sole shareholder of Voplex of Canada and Meridian Automotive Systems - DO Brasil LTDA. Meridian's wholly owned subsidiary Meridian Automotive Systems - Mexico Operations, LLC, is the holding company for and 99.97% equity holder in the Company's three Mexican entities. Growth through Acquisitions Since 1997, the Company has greatly expanded its business operations, primarily through four strategic acquisitions: (A) In October 1998, the Company purchased substantially all of the manufacturing assets of, and a 49% interest in, Lorro, a minority owned supplier, which provided the Company with the capability of manufacturing bumper energy absorbers and other impact components; (B) In May 1999, the Company expanded its product offering to include interior and lighting components through its purchase of the common stock of Leslie Metal Arts Company, Inc. This acquisition provided the Company with critical plastics capability and expertise, along with strong customer relationships primarily with GM and DaimlerChrysler; (C) In August 1999, the Company expanded its fascia production capabilities with the acquisition of a plant and certain other assets from SAI Automotive USA - Kansas City, Inc.; and (D) in July 2000, the Company purchased substantially all of the assets of Cambridge Industries, Inc., which are currently held by Composites Operations, and this acquisition enabled the Company to become a leader in the production of exterior composite plastic modules and components. These acquisitions increased the Company's ability to manufacture impact absorption bumpers, expanded its critical plastic and fascia capabilities, and enabled it to become a leading producer of exterior composite plastic modules. As a result of this expansion strategy, the Company's net sales increased from $294.7 million in 1997 to just over $1 billion for the fiscal year 2004. Over the same period, the Company's adjusted EBITDA increased from $36.9 million to $92.8 million. At March 31, 2005, the Company reported approximately $530 million in total assets and approximately $815 million in total liabilities. The Road to Chapter 11 Richard E. Newsted, Meridian's President, explains that the Company has faced "challenging industry conditions, including exponential increases in costs of essential commodities such as resin, nickel and steel, ongoing pricing pressure from OEMs, elimination of accelerated payment programs from certain OEMs, increased labor costs, and cyclical demand." These conditions, Mr. Newsted continued, have resulted in a steady deterioration of the Company's liquidity position and have forced Meridian into chapter 11 to restructure its balance sheet. Mr. Newsted points to a series of recent developments that reduced Meridian's liquidity position: * First, the market share and overall production of the Company's largest North American OEM customers has declined in recent years. Meridian typically supplies its OEM customers on a requirements basis, and is not guaranteed any set volume of business from the OEMs, Therefore, when Meridian's OEM customers decrease their production levels, the volume of the Company's business simultaneously decreases. * Second, Meridian has recently experienced exponential increases in the cost of certain essential commodities, including resin, nickel and steel. Many of the Company's supply contracts with OEM customers are for fixed prices and do not allow Meridian to pass along increased raw material costs. This leaves Meridian unprotected from the recent escalation in the cost of key raw materials. * Finally, during the third quarter of 2004, certain of Meridian's OEM customers gave notice that they were terminating their accelerated payment programs for all of their suppliers. Termination of these programs has had a materially adverse impact on Meridian's short-term liquidity position by pushing back the dates by which the Company receives payments from the OEMs. These events made it clear to Meridian that the Company would not be able to continue servicing its debt obligations at existing levels. Mr. Newsted says that the Company anticipates working with its principal economic stakeholders to effect an overall balance sheet restructuring during the course of its Chapter 11 Cases. ----------------------------------------------------------------- [00002] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Meridian Automotive Systems, Inc. Files for Chapter 11 Reorganization Normal Operations Continue Receives Commitment for $375 Million in New Financing DEARBORN, Michigan -- April 26, 2005 -- Meridian Automotive Systems, Inc. today announced that it has filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The Company and its eight domestic subsidiaries filed their voluntary petitions for relief in the United States Bankruptcy Court for the District of Delaware. Meridian said that it elected to file for reorganization in order to restructure its debt, which has become unsustainable in the current market environment. Meridian said that it needs to restructure its balance sheet in order to face the challenges posed by increases in steel and resin prices and the termination of the early payment programs by certain original equipment manufacturers (OEM). These factors, combined with reduced production by OEMs, have had an adverse impact on Meridian's liquidity position in recent months. Thomas Divird, Meridian's Chief Executive Officer, said, "Meridian has very strong operations, great relationships with a diversified customer base and high quality products. However, we need to reduce our debt and simplify our capital structure in order to remain competitive under current market conditions. After considering many options, we determined that Chapter 11 provides Meridian with the most prudent approach to restructure our balance sheet while maintaining normal operations. We expect to emerge from this process with a more appropriate capital structure that will allow us to be stronger and more efficient in the future." In conjunction with its filing, Meridian has secured commitments for up to $375 million in debtor-in-possession financing from JPMorgan, subject to court approval. This financing will be used to refinance Meridian's current First Lien facilities and provide sufficient liquidity to continue normal operations. Richard E. Newsted, Meridian's President, said, "Combined with our normal cash flow, the DIP financing that we have secured gives substantial assurance that we will be able to operate normally and continue to meet commitments to our customers throughout this process." Meridian has requested, and expects to receive, court approval to continue to pay employee salaries, wages and benefits in the ordinary course. Meridian will pay suppliers for the post- petition delivery of goods and services in the ordinary course. Meridian's operations in Mexico, Canada and Brazil were not included in the filing. The Company has established a Supplier Call Center to answer questions from its suppliers. The toll-free phone number is 866-845-1979. Meridian has retained the law firm of Sidley Austin Brown & Wood LLP as its restructuring counsel. FTI Consulting is acting as the Company's financial advisor. ----------------------------------------------------------------- [00003] MERIDIAN AUTOMOTIVE SYSTEMS CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor affiliates filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 05-11168 Meridian Automotive Systems-Composites Operations, Inc. 05-11169 Meridian Automotive Systems, Inc. 05-11170 Meridian Automotive Systems-Angola Operations, Inc. 05-11171 Meridian Automotive Systems-Construction, Inc. 05-11172 Meridian Automotive Systems-Detroit Operations, Inc. 05-11173 Meridian Automotive Systems-Grand Rapids Operation Inc. 05-11174 Meridian Automotive Systems-Heavy Truck Operations Inc. 05-11175 Meridian Automotive Systems-Shreveport Operations, Inc. 05-11176 Meridian Automotive Systems-Mexico Operations, LLC Chapter 11 Petition Date: April 26, 2005 Court: United States Bankruptcy Court District of Delaware 824 Market Street, 3rd Floor Wilmington, Delaware 19801 Telephone 302-252-2900 Judge: The Honorable Mary F. Walrath Debtors' Lead Counsel: James F. Conlan, Esq. Larry J. Nyhan, Esq. Paul S. Caruso, Esq. Bojan Guzina, Esq. SIDLEY AUSTIN BROWN & WOOD LLP Bank One Plaza 10 South Dearborn Chicago, Illinois 60603 Telephone (312) 853-7000 - and - John G. Hutchinson, Esq. Michael G. Burke, Esq. SIDLEY AUSTIN BROWN & WOOD LLP 787 Seventh Avenue New York, New York 10019 Telephone (212) 839-5300 Debtors' Local Counsel: Robert S. Brady, Esq. Edmon L. Morton, Esq. Edward J. Kosmowski, Esq. Ian S. Fredericks, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 Telephone (302) 571-6600 Debtors' Financial Advisor: FTI CONSULTING Debtors' Claims Agent: William R. Gruber, Jr. THE TRUMBULL GROUP, LLC 4 Griffin Road North Windsor, CT 06095 Telephone (860) 687-5401 U.S. Trustee: Frank J. Perch, III, Esq. Assistant United States Trustee Office of the U.S. Trustee 844 King Street, Suite 2207 Lockbox 35 Wilmington, Delaware 19801 Telephone (302) 573-6491 Fax (302) 573-6497 ----------------------------------------------------------------- [00004] LIST OF MERIDIAN AUTO'S 30-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature of Claim Claim Amount ------ --------------- ------------ Metropolitan Life Insurance Company 10 Park Avenue P.O. Box 1902 Morristown, NJ 07962 Attn: Claudia Cromie Tel: (973) 647-3421 Fax: (973) 355-4780 Attn: Lisa Glass Tel: (973) 355-4366 Fax: (212)2514563 Subordinated Notes $65,724,044 The Northwestern Mutual Life Insurance Company 720 East Wisconsin Ave. Milwaukee, WI 53202 Attn: Timothy P. Wagener II Tel: (414) 665-5365 Fax: (414) 665-7124 Attn: Karen Stevens Tel: (414) 665-7133 Fax: (414) 665-7016 Subordinated Notes $44,086,308 Caisse de Depot et Placement du Quebec c/o Capital D'Amerique CDPQ, Inc. 1000, Place Jean Paul Riopelle Montreal, Quebec H2Z 2B3 Attn: Luc Houle Fax: (514) 847-2492 Subordinated Notes $13,358,020 Ford Motor Company 5850 New King Court Troy, MI 48098-2692 Attn: Cindy Perkins Tel: (248) 267-2661 Fax: (248) 267-2578 Trade Debt $7,161,992 Walbridge Albinger 613 Abbott Street Detroit, MI 48226-2521 Attn: Randy Abdallah Tel: (313) 963-8000 Fax:(313)965-4835 Trade Debt $4,808,070 Windsor Mold 4035 Maiden Rd. Windsor, Ontario NPC 2G4 Attn: Ken Bierer Tel: (519) 972-9032 Fax:(519)972-3788 Trade Debt $4,725,021 Bose Corporation-OEM 2000 Carolina Pines Dr. Blythewood, SC 29016 Attn: Clifton Ward Tel: (803) 714-8430 Fax: (803) 714-8320 Trade Debt $3,631,914 Visteon Automotive Systems One Village Center Dr. Van Buren Twp., MI 48111-5711 Attn: Greg Garman Tel: (734) 710-2761 Fax: (734) 736-5637 Trade Debt $3,189,718 Concours Mold, Inc. 3400 St. Etienne Blvd. Windsor, Ontario NSW 5E1 Attn: Andy Aiton Tel: (514) 944-9933 Fax: (514) 944-9935 Trade Debt $2,943,600 Ridgeview Industries 27273 Mile Rd. NW Grand Rapids, MI 49544 Attn: Scott Berg Tel: (616) 453-8636 Fax:(616)435-3651 Trade Debt $2,841,177 JSP International 273 Great Valley Parkway Malvern, PA 19355 Attn: Pat Rich Tel: (610) 651-8610 Fax:(610)651-8601 Trade Debt $2,748,275 Century Tool & Gage Company 200 South Alloy Dr. Fenton, MI 48430 Attn: Mike Cummings Tel: (810) 629-0784 Fax: (810) 629-9284 Trade Debt $2,662,860 Saint Gobain Vetrotex America 4515 Allendale Rd. Wichita Falls, TX 76310 Attn: Pam Koch Tel: (800) 433-0922 Fax: (940) 689-3449 Trade Debt $2,542,712 Ashland Chemical Company P.O. Box 2219 Columbus, OH 43216 Attn: Roger Adkins Tel: (614) 790-3953 Fax: (614) 790-3735 Trade Debt $2,358,737 Windward Capital Partners, LP 712 Fifth Avenue, 21st Floor New York, NY 10019 Attn: Peter Macdonald Tel: (212) 382-6516 Fax: (212)382-6534 Consulting Fees $2,245,064 H.H. "Buddy" Wacaser 370 Lower Station Camp Creek Gallatin, TN 37066 Attn: H.H. "Buddy" Wacaser Tel: (313) 253-3544 Severance Pay $2,108,334 Delphi Delco Electronics Systems One Corporate Center P.O. Box 9005 Kokomo, IN 46904-9005 Attn: Richard Peters Tel: (313) 996-3661 Fax: (313) 996-3697 Trade Debt $1,843,380 Magic Steel Sales, LLC 4242 Clay Ave. SW Grand Rapids, MI 49548 Attn: Greg Elksnis Tel: (616) 532-4071 Fax: (616) 532-0565 Trade Debt $1,783,305 ITS/International Tooling 731 Broadway N.W. Grand Rapids, MI 49501 Attn: Ed Metzler Tel: (616) 459-8285 Fax:(616)459-8292 Trade Debt $1,707,890 Advanced Tooling Systems 1166 Seven Mile Rd. Comstock Park, MI 49321 Attn: Drew Boersma Tel: (616) 784-7513 Fax: (616) 784-4780 Trade Debt $1,588,332 Omega Tool Corporation 2045 Solar Crescent Oldcastle, Ontario NRO 1LO Attn: Louis Zonta Tel: (519) 737-1201 Fax: (519) 737-7719 Trade Debt $1,483,840 ABB Flexible Automation Inc. 1250 Brown Road Auburn Hills, MI 48326 Attn: Lauranc Delaurier Jr. Tel: (800) 435-7365 Fax: (248) 391-7370 Trade Debt $1,356,632 Greenville Tool & Die Co. 1215 S. Lafayette St. P.O. Box 310 Greenville, MI 48838 Attn: Terry Swan Tel: (616) 754-5693 Fax:(616)754-5500 Trade Debt $1,266,200 H&H Metal Source 3909 Turner NW Grand Rapids, MI 49504 Attn: Brian Harris Tel: (616) 364-0113 Fax: (616) 364-0904 Trade Debt $1,259,443 Alpha Owens Corning 2552 Industrial Dr. Valparaiso, IN 43686 Attn: James Plaunt Tel: (734) 995-6779 Fax: (734) 995-6784 Trade Debt $1,229,003 All Tech Engineering 1030 58th St. SW Wyoming, MI 49509 Attn: Bruce Bunker Tel: (616) 406-0681 Fax: (616) 406-0690 Trade Debt $1,210,392 Solvay Engineered Polymers 1200 Hartnon Rd. Auburn Hills, Ml 48326 Attn: Jean Meador Tel: (817) 792-1892 Fax: (817) 792-2851 Trade Debt $1,115,370 Plastech Engineered Products 38070 Ecorse Rd. Romulus, MI 48174 Attn: Scott E. Rezebek Tel: (734) 713-4916 Fax: (734) 641-0606 Trade Debt $1,025,904 Dupont Company 950 Stephenson Hwy. Troy, MI 48083 Attn: Tab Semanision Tel: (248) 583-4543 Fax: (248) 583-8192 Trade Debt $892,193 Rohm & Haas Company 2701 East 170th St. Lansing, IL 60438 Attn: Andy Cooper Tel: (708) 474-7000 Fax: (708) 868-7490 Trade Debt $817,535 ----------------------------------------------------------------- [00005] S&P CUTS MERIDIAN'S CREDIT RATING TO D ----------------------------------------------------------------- NEW YORK, New York -- April 26, 2005 -- Standard & Poor's Ratings Services said today that it lowered its corporate credit rating on Meridian Automotive Systems Inc. to 'D' from 'CCC+' following the company's Chapter 11 bankruptcy filing. Dearborn, Mich.-based Meridian has total debt of about $600 million, including the present value of operating leases. "The bankruptcy filing was precipitated by very difficult industry conditions," said Standard & Poor's credit analyst Martin King, "including reduced vehicle production, pricing pressure, and higher raw material costs that led to reduced earnings and cash flow generation and constrained liquidity." At the same time, Standard & Poor's placed the recovery ratings on the senior secured bank facility on CreditWatch with positive implications. Meridian has received a commitment for $375 million in debtor-in-possession financing, subject to court approval, which will be used to refinance first-lien debt and provide liquidity to continue normal operations while the company is in bankruptcy, although the allocation of proceeds is unknown. "We will review any financials and restructuring plans that may become available, to assess the impact on recovery prospects," Mr. King said. "The '4' first-lien recovery rating could be raised if we believe lenders will receive more than 50% recovery, and the '5' second-lien rating could be raised if lenders are expected to receive more than 25% recovery. If sufficient information is not available in the near term, we will withdraw the recovery ratings." Meridian's operating performance has deteriorated because of the industry pressures. Although the most recent company financial reports date back to the third quarter of 2004, we believe Meridian's earnings and cash are substantially short of the company's business plan. Liquidity is believed to be very thin, because of poor cash flow generation and the termination of various customers' accelerated accounts receivable programs. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at http://www.ratingsdirect.com/ All ratings affected by this rating action can be found on Standard & Poor's public Web site at http://www.standardandpoors.com/ under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. ----------------------------------------------------------------- [00006] DEBTORS' MOTION TO PAY UP TO $16 MIL. TO CRITICAL VENDORS ----------------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates ask Judge Walrath for authority to spend up to $16,000,000, without further conversations with or oversight by the Bankruptcy Court, to pay (in full or in part) prepetition amounts owed to unidentified critical vendors and suppliers the Company determines, in its sole discretion, are essential to the Debtors' business operations. Meridian says this $16 million figure represents about 14.7% of the Company's total prepetition trade debt. Meridian believes that payment of these Critical Vendor Claims is vital to the Company's reorganization efforts because: (1) the Critical Vendors are often the only source from which the Debtors can procure certain goods or services, (2) failure to pay the Critical Vendor Claims would, in the Debtors' business judgment, result in the Critical Vendors refusing to provide goods or services to the Debtors post-petition, (3) the Critical Vendors provide goods and services to the Debtors on advantageous terms, and (4) in certain instances, the Critical Vendors would themselves be irreparably damaged by the Debtors' failure to pay their prepetition claims, resulting in the Debtors being forced to obtain goods and services elsewhere that would either be at a higher price or not of the quality required by the Debtors. Meridian believes that failure to pay the Critical Vendor Claims would likely result in: (A) the Debtors' inability to obtain necessary materials for their manufacturing operations, (B) temporary shutdowns of the manufacturing facilities operated by the Debtors' OEM customers, and (C) severe negative effects on the Debtors' OEM customers, which include most of the North American automotive industry. Meridian says this parade of horribles is due to the highly integrated nature of the OEM supply chain, the Debtors' central and key role in the supply chain, and the OEM customers' stringent quality requirements that limit the availability of alternative suppliers. As a result, the Critical Vendors' refusal to provide goods and services to the Debtors post- petition could have a ripple effect throughout the automotive industry, potentially resulting in shutdowns of the manufacturing facilities operated by the Debtors and their customers. James F. Conlan, Esq., at Sidley Austin Brown & Wood LLP, representing Meridian, assures the Court that the Debtors and their advisors have critically examined whether the payment of Critical Vendor Claims is necessary and will ensure that the Debtors have access to adequate amounts of trade credit on a post-petition basis. The Debtors intend to condition the payment of any Critical Vendor Claim on each Critical Vendor's agreement to continue supplying goods and services to the Debtors on terms that are consistent with the historical trade terms between the parties within the past 120 days or on the best terms they can negotiate. The Debtors expect that all recipients of Critical Vendor Payments will waive any reclamation claims. Recipients of Critical Vendor Payments must also agree to return the payment if they subsequently refuse to supply goods to the Debtors on Customary Trade Terms. The Debtors reserve the right to come back to Court to ask that the Critical Vendor Cap be increased at a later date if necessary. The Debtors say that the continued availability of trade credit in amounts and on terms consistent with those the Company enjoyed prepetition is critical because it will preserve working capital while maintaining optimal production levels. The retention or reinstatement of Customary Trade Terms will enable the Debtors to maximize the value of their businesses. Conversely, a deterioration in post-petition trade credit and a disruption or cancellation of deliveries of goods -- many of which are not readily replaceable -- would cripple the Debtors' business operations, increase the amount of funding needed by the Debtors post-petition (which might not be readily available), and ultimately impede the Debtors' ability to service their customers, thereby placing their customer base, as well as their successful reorganization, at risk. The Debtors point Judge Walrath to a long list of bankruptcy cases in the District of Delaware where she and Chief Judge Walsh have approved payment of critical trade claims where the payment of those claims is essential to the debtor's continued operation: Just for Feet 242 B.R. at 826 (authorizing payment of prepetition claims of trade creditors that continue customary trade terms); In re Glass Group, Inc., Case No. 05-10532 (Bankr. D. Del. Mar. 2, 2005) (Walsh, J.) (same); In re Maxide Acquisitions, Inc., Case No. 05-10429 (Bankr. D. Del. Feb. 15,2005) (Walrath, J.); In re Fleming Companies, Inc., Case No. 03-10945 (Bankr. D. Del. May 6, 2003) (Walrath, J.) (same); In re Alterra Healthcare Corp.. Case No. 03-10254 (Bankr. D. Del. Jan. 24,2003) (Walrath, J.) (same); In re Genesis Health Ventures, Inc., Case No. 00-2692 (Bankr. D. Del. June 26, 2002) (Walsh, J.) (same). The Debtors also point Judge Walrath to In re Maxxim Medical Group, Inc., Case No. 03-10438 (Bankr. D. Del. Feb. 19, 2003) (Walsh, J.), for an example of a case in which the Delaware court upheld a debtor's remedies against a Critical Vendor for breach of a Trade Agreement. *** End of Issue No. 1 ***