Delphi gets court approval to set maximum cap on unliquidated claims

By Reshmi Basu

New York, Sept. 27 - Delphi Corp. received court approval Thursday to set a maximum cap on unliquidated claims filed against the company from the U.S. Bankruptcy Court for the Southern District of New York.

According to the company's plan of reorganization, the total distribution relating to certain trade claims and other unsecured claims cannot exceed $1.7 billion. However, there are 316 contingent or unliquidated proofs of claims that do not flow through Delphi's Chapter 11 case or that still need to be resolved.

"Given where we are in the exit, we do need to move forward under the estimation provision [of the bankruptcy code]," said Delphi counsel Jack Butler of Skadden, Arps, Slate, Meagher & Flom LLP in court Thursday.

However, Butler cautioned that Thursday's request solely dealt with the estimation procedures for fixing a reserve amount. Objections relating to distributions will be dealt with at the confirmation hearing.

As previously reported, the company said it is seeking to estimate all unliquidated claims solely for the purposes of tabulating votes on the plan and setting appropriate reserves.

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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