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Delphi DIP loan lender decries company's attempt to force extension, accommodation agreement consent
By Caroline Salls
Pittsburgh, Nov. 20 - Delphi Corp. tranche A debtor-in-possession facility lender Calyon New York Branch said the company's DIP loan refinancing supplement motion is designed to "disenfranchise lenders with significant exposure" unless they consent to Delphi's proposed accommodation agreement, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.
In addition, Calyon said Delphi is trying to extend the DIP loan maturity date without securing the consent of 100% of the lenders; modify the payment priorities between the A, B and C tranche lenders by converting unsecured administrative claims to superpriority senior secured claims; and dilute the collateral of the tranche A and B lenders by collateralizing an additional $200 million of hedging claims.
"Calyon is sympathetic to the plight of the debtors," the lender said in the objection.
"Industry turmoil and bad credit markets, however, do not absolve the debtors from their post-petition contractual obligations."
While Calyon said some provisions of the proposed accommodation agreement are "financially attractive," it said approval of the accommodation agreement will significantly impair the rights of lenders.
"This court has the sole jurisdiction to interpret [the DIP loan approval order] and insure that it is enforced in accordance with its terms, such that the lenders who relied on it are given the benefit of their bargain," Calyon 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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