Dana Corporation (OTC:DCNAQ) said Friday that it has reached an agreement with its unions and secured $750 million to help it exit Chapter 11 bankruptcy. The bankrupt auto parts maker announced that its unions have agreed to back a reorganization plan that includes labor settlements and funding commitments.

The union agreement would replace the company's healthcare and long-term disability obligations for retirees and union employees with trusts to which the company would contribute $700 million in cash and $80 million in stock. This change is expected to save the company more than $100 million per year.

Now that agreements have been reached with its unions, investors are beginning to see the light at the end of the tunnel. Centerbridge Capital Partners and its affiliates have agreed to purchase $500 million in convertible stock and facilitate an additional $250 million in funding from others. Many now believe that the company is on track to have a reorganization plan in place by September and be able to emerge from bankruptcy by the end of the year.

So, what does this mean for shareholders? Well, the fate of existing shareholders remains uncertain. While the company's assets outnumbered its liabilities as it entered bankruptcy (suggesting that common stock still had value), there are costs associated with the reorganization itself that may push down value further. Until these costs are fully detailed, it's hard to say whether or not the current common stock is worth anything.

Investors looking for bankruptcy investing opportunities may find this stock interesting. New stock in a company that has just emerged from bankruptcy is often undervalued. This is simply because the holders of this stock are often debtors that want nothing more to do with the company. Obviously, people are also skeptical as to whether or not the company can turn itself around after having already burned shareholders once. This deep value can translate to healthy profits in the event that the company is successful in turning itself around.

The healthy M&A market for automakers and auto parts makers is also something that is worth noting. Many private equity firms have already taken advantage of companies fresh out of bankruptcy court as their stock is often traded at a substantial discount while most of their large debts have been satisfied. The best examples of these transactions occurred in the airlines industry a few years ago.

Combined, Dana Corporation is definitely a company worth watching as it emerges from bankruptcy. While investment in its bankrupt shares may be a risky bet, investors may find an appetite for newly issued post-bankruptcy shares as they will likely be undervalued.

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NovaStar Financial (NYSE:NFI) shares rose as high as 13 percent yesterday amid rumors that the troubled subprime lender may have found a buyer. The Kansas-based company, which provides loans to borrowers with poor credit, has been searching for a buyer since April without success. Investors are hoping that the troubled company can avoid bankruptcy by finding a buyer willing to take on its debt and reward shareholders with a premium buyout price.

NovaStar is one of many subprime lenders that fell victim to an overzealous public. Subprime lenders were able to make a substantial amount of money by lending money to borrowers with poor credit and charging higher interest rates to make up. However, problems began occurring when many of these borrowers began to default on their loans as their variable rate mortgage payments began to balloon. Unfortunately, many subprime lenders were highly leveraged, which led to a substantial windfall.

So, what are the chances that NovaStar will find a buyer? Well, Accredited Home Lenders (NYSE:LEND) was able to find a private equity fund willing to pay $400 million for the company, but this appears to be the exception amid many bankruptcies including that of New Century. Investors must also not forget the "imminent sale" rumor that surfaced last month leading to a 16 percent run-up that was quickly erased. Of course, the company would also not comment on any rumors.

Overall, investors should remain skeptical and prudent when trying to read this stock. The company may be open to a buyout - which helps - but selling a subprime lending firm in this environment could prove to be difficult without a substantial discount. This is definitely a stock to watch, but maybe not one to buy until more solid information surfaces.

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Cadbury Schweppes (NYSE:CSG) may have a buyer for its Snapple brand after reports surfaced that Coca Cola (NYSE:KO) has approached several private equity firms involved in bidding for Cadbury's drinks business. The confectionery company agreed to sell the division - which includes brands like 7-Up and Dr. Pepper - to private equity firms who are expected to pony up around $15 billion.

Snapple has proven to be a great investment for its owners over the years. Billionaire Nelson Peltz sold the brand to Cadbury for $1.5 billion, which was five-times more than his purchase price of $300 million just three years earlier. Now Coca Cola's interest in the brand could dramatically increase the value of its drinks business being sold to private equity.

Coca Cola confirmed that it was exploring the possibility of either purchasing the Snapple iced-tea brand or creating its own brand from scratch. Since the company cannot make a bid for the entire division due to antitrust regulations, it will be forced to purchase the Snapple division from one of the several private equity firms that are making a bid. The firms expected to be placing bids include Blackstone, KKR and others.

In the end, the Snapple brand is clearly a valuable asset to Cadbury that may end up increasing the value of its drinks portfolio. This makes CSG a stock worth watching as this sale process unfolds.

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