Lear Corp. (NYSE: LEA) Files for Chapter 11 Bankruptcy Protection

Lear Corporation (NYSE: LEA), the automotive parts supplier, filed for Chapter 11 bankruptcy protection on Tuesday.

Lear made the decision after receiving support from lenders and bondholders to reconstruct their business.

Lear issued the filing in the U.S. Bankruptcy Court for the Southern District of New York, listing $1.27 billion in assets and $4.54 billion in liabilities. Subsidiaries outside the U.S. and Canada are not part of the filings, the company said.

The auto supplier's first court appearance was scheduled for 4 p.m. ET Tuesday before U.S. Judge Allan Gropper in New York, according to Associated Press.

Lear is the first major automotive parts maker to seek court protection since Visteon Corp., the former parts arm of Ford Motor Company (NYSE: F), filed in May.

The Chapter 11 filings by General Motors Corporation (NYSE: GM) and Chrysler Group LLC and the lack of production from most of their factories have caused a huge impediment in the auto supply base.

Lear was affected severely by the economic downturn 36 percent of its sales coming from North America and 49 percent coming from Europe.

Lear, which posted $13.6 billion in sales for 2008, is a key supplier for both GM and Ford. The pair represents the company's two largest customers and account for a combined 40 percent of its sales.

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