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GM says Delphi bankruptcy emergence not coming soon, if at all
By Caroline Salls
Pittsburgh, Nov. 10 - General Motors Corp. warned that Delphi Corp. "is unlikely to emerge from bankruptcy in the near term and possibly may not emerge at all," according to a 10-Q filed Monday with the Securities and Exchange Commission.
"The current credit markets, the lack of plan investors and the challenges facing the auto industry make it difficult for Delphi to emerge from bankruptcy," GM said in the 10-Q.
"As a result, it is unlikely that Delphi will emerge from bankruptcy in the near term, and it is possible that it may not emerge successfully or at all."
If Delphi is unable to successfully emerge from bankruptcy in the near term, GM said Delphi may be forced to sell all of its assets, which would force GM to pay more to secure the parts it needs until alternative suppliers are secured or new contracts are executed with the buyers of Delphi's assets.
In addition, based on estimated cash requirements through Dec. 31, 2009, GM also said it does not expect its operations to generate enough cash flow to fund its debt obligations as they come due, and the company does not currently have other traditional liquidity sources available to fund the obligations.
GM said it has "taken far reaching actions" to restructure its U.S. business, but the effect of current global economic and credit market conditions on the automotive industry require it to obtain additional near-term liquidity support.
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.
GM is a Detroit-based automotive company.
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