Delphi asks for court approval of license agreement with GM

By Reshmi Basu

New York, Sept. 18 - Delphi Corp. requested court approval for a license agreement with General Motors Corp. and its subsidiary General Motors Global Technology Operations, Inc., according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As part of its reorganization plan, Delphi will sell certain non-core businesses, many of which provide products necessary for GM's manufacturing operations.

According to the motion, the license agreement allows Delphi to sell those businesses while ensuring that its largest customer, GM, retains access to Delphi's intellectual property.

Under the agreement, GM would continue to acquire components that are based on certain technology owned by Delphi. In addition, Delphi would receive $38.5 million from GM.

On Sept. 6, Delphi entered into a far-reaching agreement with former parent GM that would resolve outstanding issues related to disputes over claims and certain supply agreements.

While the license agreement is a component of that global settlement agreement, Delphi said delaying the implementation of the agreement "until confirmation likely would have adverse effects on the exit or sale of certain non-core businesses."

A hearing is scheduled for Sept. 27.

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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