Delphi tranche C lender says company seeking DIP loan extension without required consent

By Caroline Salls

Pittsburgh, Nov. 19 - Delphi Corp. debtor-in-possession facility tranche C lender Greywolf Capital Management, LP objected to the company's proposed accommodation agreement and supplement to its January 2007 DIP loan refinancing order, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

"No matter how the debtors characterize the requested relief, there is one inescapable reality - the debtors are requesting an extension of the maturity date of the DIP credit agreement," Greywolf said in the objection.

In addition, the lender said Delphi is asking the court to excuse it from a DIP agreement requirement that all of the DIP lenders consent to an extension.

"Greywolf does not consent," the lender said in the filing.

According to the objection, Delphi received unanimous approval from the lenders to extend the DIP facility twice before.

"Now, because the debtors expect that unanimous consent of the DIP lenders is unlikely in the current credit market, they seek to force Greywolf into indentured servitude by holding in excess of $100 million of its funds hostage for an additional six months," Greywolf said in the objection.

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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