Tier I supplier Visteon has encountered problems with its plan to exit from Chapter 11 bankruptcy protection as an investor has challenged its reorganization plan that is due for a vote on July 30.

Fulcrum Credit Partners LLC has written a letter to Visteon suppliers asking them to vote down the exit plan claiming that Visteon is paying a higher return to bondholders in violation of bankruptcy rules that require similar debts be treated in the same manner.  Visteon has agreed to pay its suppliers 50% of what they are owed in its exit plan.  Fulcrum says it purchased the right to collect certain supplier debt and should thus be treated in the same way.

Fulcrum's Managing Principal Matthew Hamilton provided Bloomberg News with a copy of a letter sent to Visteon suppliers in which Hamilton said, "It is a travesty that the plan forces our class to give up more than $80 million of value." 

Visteon's reorganization plan is said to propose dividing creditors owed at least $2.8 billion.  Bondholders who are sponsoring the plan would own 95% of Visteon, with the current shareholders owning the remaining 5%.  Unsecured creditors, including suppliers, would be paid about 50% of what they are owed.