The Wall Street Journal
Delphi And The ‘Guys In Suits’
written by By Marie Beaudette
Wednesday June 10, 2009, 2:49 PM ET
In all the hustle and bustle over General Motors’ bankruptcy filing, you may have missed big news in the Chapter 11 case of its former parts unit and largest supplier – Delphi Corp. On June 1, after GM filed its own bankruptcy petition, Delphi announced it had finally reached a deal on a new plan to end its nearly four-year-old Chapter 11 case. Delphi, GM, the Treasury Department and Platinum Equity, the private equity firm that’s agreed to buy Delphi, are in court today in New York to seek approval to move forward with the deal.
There’s just one problem: Delphi’s bankruptcy lenders are having none of it. They’re accusing GM, Delphi, Platinum and the Treasury Department of rigging the deal in secret and leaving them out of the loop. They want rival bidders to have a chance to make an offer for Delphi, but the plan proposed by the company doesn’t allow for the usual bankruptcy-auction process. Daily Bankruptcy Review’s David McLaughlin is covering the court hearing and says it appears that Judge Robert Drain is also confused about the decision to bypass an auction.
“As far as I’m concerned, they’re just guys in suits,” said Drain. “Why can’t other guys in suits pay more?”
For its part, Delphi claims that the reason for the auction-less sale is GM’s insistence that it approve the buyer. GM, you see, is essentially funding the sale with a $2 billion cash injection. The auto maker has also agreed to take on $1.6 billion of Delphi’s pensions. Platinum itself will contribute $250 million in cash and another $250 million loan to fund the deal. GM is also providing a $500 million loan.
Drain, however, isn’t sure why Platinum is the only buyer GM will sign off on.
Please click HERE to read the entire article... MUST READ!
Delphi And The ‘Guys In Suits’
written by By Marie Beaudette
Wednesday June 10, 2009, 2:49 PM ET
In all the hustle and bustle over General Motors’ bankruptcy filing, you may have missed big news in the Chapter 11 case of its former parts unit and largest supplier – Delphi Corp. On June 1, after GM filed its own bankruptcy petition, Delphi announced it had finally reached a deal on a new plan to end its nearly four-year-old Chapter 11 case. Delphi, GM, the Treasury Department and Platinum Equity, the private equity firm that’s agreed to buy Delphi, are in court today in New York to seek approval to move forward with the deal.
There’s just one problem: Delphi’s bankruptcy lenders are having none of it. They’re accusing GM, Delphi, Platinum and the Treasury Department of rigging the deal in secret and leaving them out of the loop. They want rival bidders to have a chance to make an offer for Delphi, but the plan proposed by the company doesn’t allow for the usual bankruptcy-auction process. Daily Bankruptcy Review’s David McLaughlin is covering the court hearing and says it appears that Judge Robert Drain is also confused about the decision to bypass an auction.
“As far as I’m concerned, they’re just guys in suits,” said Drain. “Why can’t other guys in suits pay more?”
For its part, Delphi claims that the reason for the auction-less sale is GM’s insistence that it approve the buyer. GM, you see, is essentially funding the sale with a $2 billion cash injection. The auto maker has also agreed to take on $1.6 billion of Delphi’s pensions. Platinum itself will contribute $250 million in cash and another $250 million loan to fund the deal. GM is also providing a $500 million loan.
Drain, however, isn’t sure why Platinum is the only buyer GM will sign off on.
Please click HERE to read the entire article... MUST READ!
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