[DeTomaso] Holley goes belly-up!!!

[MikeLDrew at aol.com]

Holley, Specialty Car-Parts Maker, Files Bankruptcy (Update2) 

By Steven Church

Feb. 11 (Bloomberg) -- Holley Performance Products Inc., a century-old maker 
of specialty parts for stock-car and drag- racing, filed for bankruptcy, 
faulting a late 1990s expansion for saddling the company with too much debt.

Closely held Holley would be taken over by noteholders owed as much as $145.8 
million, according to an outline of a reorganization plan filed today in U.S. 
Bankruptcy Court in Wilmington, Delaware. The company, based in Bowling 
Green, Kentucky, listed debts of $243 million and assets of $106 million as of Jan. 
28.

In the years following its expansion, ``Holley did not generate sufficient 
cash flows to support the debt incurred,'' Chief Financial Officer Thomas W. 
Tomlinson said in an affidavit.

Holley and four of its affiliates filed for bankruptcy protection about two 
years after the company renegotiated the terms on part of the 12.5 percent 
notes that were due last year. Holley's majority shareholder, funds managed by 
Kohlberg & Co., quit providing the company the cash it needed to make interest 
payments, according to court papers.

The reorganization will cut Holley's debt by about $100 million, Tomlinson 
said in a telephone interview today.

Holley has about 390 employees in Kentucky, California and Mississippi who 
make carburetor and other fuel and air-systems parts with brand names including 
Hooker, FlowTech and Nitrous Oxide Systems.

Nascar Sponsor

``Employees will not be affected by the bankruptcy, and the company will 
continue operations as normal,'' Tomlinson said.

Holley's customers include Ford Racing and GM Performance Parts. The company 
is a sponsor of the National Hot Rod Association and has a program that 
supports the National Association for Stock Car Auto Racing, (Nascar), according to 
court documents.

The company was founded in 1903 by brothers George and Earl Holley, who 
designed a carburetor for the Ford Model T called the Iron Pot. Later, Holley built 
engine parts for planes during World War II, according to the company's Web 
site.

Under a deal negotiated with 70 percent of the company's second-lien 
noteholders, Holley would pay its general unsecured creditors, such as trade vendors, 
in full and give almost all its equity to the noteholders, according to a 
description of the reorganization plan, called a disclosure statement, filed 
today.

Noteholders would get about 45.8 percent of what they're owed under the 
proposal, which requires a judge's approval.

The case is: In re Holley Performance Products Inc., 08-10256, U.S. 
Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporters on this story: Steven Church in Wilmington, 
Delaware, at schurch3 at bloomberg.net ; Michael Bathon in Wilmington, Delaware, at 
mbathon at bloomberg.net .
Last Updated: February 11, 2008 17:16 EST





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