A bankruptcy court judge has cleared the way for auto parts supplier Visteon Corp. to begin soliciting votes on its proposed reorganization plan.

The judge in Delaware approved documents describing the Michigan company’s proposed reorganization plan and the process for creditors to vote on it.
Under Visteon’s plan, unsecured bond holders would take roughly a 95 percent stake in the reorganized company by buying $300 million of stock and raising another $950 million in a stock rights offering to help pay off secured lenders.

If the bondholders fail to raise the money, Visteon would revert to a previous plan to convert the secured lenders’ debt to an 85 percent equity stake in the new company, with the rest going to the bond holders.