Delphi creditors committee objects to company's disclosure statement

By Reshmi Basu

New York, Nov. 2 - Delphi Corp.'s official committee of unsecured creditors objected to the company's disclosure statement, saying the plan does not reflect the deal the committee struck with the company, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The creditors committee said it bargained for post-petition interest to accrue until the date the plan is confirmed. However, under the new version, that post-petition interest for general unsecured claims would end on Dec. 31, despite the fact that the plan will not be confirmed by that date.

In addition, the creditors committee and Delphi had previously agreed that all trade and other unsecured claims shall not exceed $1.45 billion. But Delphi added a new amendment that says plan investor Appaloosa Management, LP can waive the claims condition if the company surpasses that amount, giving the green light to Delphi to issue additional shares that would then dilute the value of the common stock distributed under the plan to holders of general unsecured claims.

Finally, the committee said the disclosure statement lacked adequate information and that the document needed to be revised to remove all statements regarding the creditors committee's support.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

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