American Suzuki Chapter 11 Plan Confirmed
Irell & Manella represented the Official Committee of Unsecured Creditors (the “Committee”) in connection with the Chapter 11 proceedings of American Suzuki Motor Corporation (“American Suzuki”). The Hon. Scott C. Clarkson of the United States Bankruptcy Court confirmed American Suzuki’s plan of liquidation ("the Plan") at a hearing on February 28, 2013. The Plan was recently amended to incorporate a settlement reached by Irell on behalf of the Committee.
American Suzuki was the exclusive United States distributor of Suzuki products, including automobiles, motorcycles, outboard engines and all-terrain vehicles. Under the Plan, American Suzuki will terminate sales of new automobiles and transfer the remainder of its business to a new entity, Suzuki Motor of America, Inc. (“SMAI”), which will become the new exclusive United States distributor of Suzuki motorcycles, outboard engines and all-terrain vehicles. Pursuant to the settlement between the Committee, American Suzuki and American Suzuki’s Japanese parent corporation, Suzuki Motor Corporation (“SMC”), SMC will guaranty a 100 percent return to settling unsecured creditors and supply additional funds to increase the expected recovery for non-settling unsecured creditors from five to 20 percent. In addition, as part of the settlement, SMC will assume liability for the $30 million claim filed by the Internal Revenue Service and the debtor’s director and officer indemnity obligations, which have a face value of $10 million.
Mitchell Cohen served as lead bankruptcy counsel to the Committee.