Delphi board asked to meet with Highland amid Cerberus plan proposal troubles

By Caroline Salls

Pittsburgh, April 19 - Delphi Corp.'s board of directors received a proposal to meet with Highland Capital Management, LP to discuss how to proceed toward an alternative plan for the reorganization of the company, according to a Highland news release.

According to the release, Highland's letter requesting a meeting with Delphi's board came after recent public disclosures indicating that Delphi's current plan proposal made by a group of investors led by Cerberus Capital Management, LP and Appaloosa Management LP is at an impasse.

"We continue to believe that, as Delphi's second largest shareholder, Highland can play a key role in bringing together the company, its many stakeholders and other potential sponsors to formulate an alternative plan in the form of a broad-based rights offering that would be fair and in the best interests of all Delphi stakeholders," Highland Capital partner Patrick Daugherty said in the release.

"We look forward to working with Delphi's management, its board, General Motors, the UAW and other unions, and all other key constituents in a full and open process to develop and implement a beneficial solution for all involved."

Highland's letter mentioned recent public disclosures regarding the inability of the parties to obtain the necessary approvals and agreements in order to proceed with the Appaloosa/Cerberus proposal, as well as the possible withdrawal of the Appaloosa/Cerberus proposal.

Highland Capital said it previously submitted a proposal to purchase new common equity of the reorganized Delphi under a back-stop of a rights offering, but Highland's proposal was rejected by Delphi and its board of directors.

"Given the fact that time has been lost pursuing the Appaloosa/Cerberus proposal rather than pursuing a transaction that would have benefited the interests of all of the stakeholders of Delphi, we believe it is imperative that the company proceed with respect to such a new transaction and a meeting be set up immediately to discuss the mechanics of proceeding with such a transaction," Highland said in the letter.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.

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