Lynn Tilton Weighs Sale of Dura Automotive

(Bloomberg) -- Financier Lynn Tilton is working with Jefferies Financial Group Inc. to seek buyers for auto-parts maker Dura Automotive Systems Inc., according to people familiar with the matter, as she looks to unload some of her investment firm’s holdings to repay creditors.

Dura, owned by Tilton’s Patriarch Partners, could fetch about $1 billion, said the people, who asked not to be identified because the matter isn’t public. Jefferies is preparing Dura for an auction likely to draw interest from private equity firms and other auto-parts suppliers, they said.

A representative for Jefferies declined to comment while representatives for Dura and Patriarch didn’t respond to requests for comment.

Dura comes to market after Tilton reached a legal settlement in May with bond insurer MBIA Inc. The agreement involved three bankrupt investment funds Tilton and MBIA had created to originate loans for distressed companies owned by her turnaround firm.

Tilton agreed to step aside as head of the funds for at least 15 months, according to court documents. She can resume her position if she can repay MBIA and other creditors with proceeds from selling or refinancing some of her portfolio companies. The documents don’t publicly detail which ones.

Tilton has 25 operating companies, including Dura, MD Helicopters Inc. and Rand McNally, she said in a bankruptcy court filing in March.

Patriarch acquired Dura for $125 million in 2010, less than two years after the company emerged from bankruptcy. It now generates about $90 million in annual earnings before interest, tax, depreciation and amortization, the people familiar with the matter said.

Dura, based in Auburn Hills, Michigan, designs and makes driver control systems, lightweight metal vehicle frames, battery trays and other auto body parts, according to its website.

Tilton started Patriarch in 2000 after two decades as an investment banker at firms including Morgan Stanley, Goldman Sachs Group Inc. and Amroc Investments. A celebrity within the business world, she specializes in buying troubled companies and fixing them.

To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;David Welch in Southfield at dwelch12@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks

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