Delphi indenture trustee objects to exit facility request amid investment proposal uncertainty

By Caroline Salls

Pittsburgh, Nov. 13 - Delphi Corp. senior debt indenture trustee Wilmington Trust Co. objected to the company's request for approval of an engagement letter for $6.05 billion in exit financing in light of the uncertainty surrounding Delphi's Appaloosa Management, LP investment agreement, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Appaloosa filed a schedule 13D/A with the Securities and Exchange Commission on Nov. 6 to report that its revised investment proposal had terminated because Delphi failed to meet some conditions.

Wilmington said Delphi confirmed in a news release that the conditions to effectiveness of an Oct. 30 amendment to the investment agreement were not satisfied in time for a hearing scheduled for Nov. 8, and the investors were no longer required to execute the amendment.

However, Delphi said the underlying investment agreement is still effective.

As a result, Wilmington said Delphi has not offered a "good business reason" for moving forward with the exit facility motion "in light of this material change of circumstances."

Wilmington said Delphi's exit financing arrangements seem to be contingent on approval of the amended Appaloosa equity purchase commitment agreement.

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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