Sifco Seeks to Bar U.S. Suits Amid Brazil Reorganization

Sifco SA, a Brazilian auto-parts maker, asked a bankruptcy court to block creditors from taking legal action against the company’s assets in the U.S. while it reorganizes in Brazil.

The Sao Paulo-based supplier of front axles for trucks and buses has assets of more than $100 million and debt of more than $500 million, according to a Chapter 15 petition filed in U.S. Bankruptcy Court in Manhattan. If a judge grants Chapter 15 relief, creditor actions in the U.S. will be halted and a Brazilian court will oversee Sifco’s main bankruptcy case.

Sifco has distribution and supply agreements with Maumee, Ohio-based Dana Holding Corp. (DAN) in Latin America, according to Standard & Poor’s. Fitch Ratings affirmed Sifco’s default rating at B- in September, citing “weak liquidity, high financial leverage, and business risk in the cyclical automotive business.”

The case is In re Sifco SA, 14-bk-11179, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Dawn McCarty in Wilmington at dmccarty@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Stephen Farr, Charles Carter

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