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Delphi, Furukawa settle sensor contract breach lawsuit
By Caroline Salls
Pittsburgh, Aug. 6 - Delphi Corp. requested court approval of a breach lawsuit settlement under which Furukawa Electric North America APD and Furukawa Electric Co. Ltd. have agreed to pay Delphi $16.5 million to Delphi debtor DAS LLC, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
According to the motion, Delphi filed a lawsuit against Furukawa in October 2004 to recover damages arising from an alleged breach of a torque and position sensor supply contract. In September 2007, Delphi asserted a claim seeking payment of at least $24 million in connection with the alleged contract breach.
Furukawa filed a $2.59 million unsecured claim of its own for alleged breach of contract damages related to the sensor agreement.
Furukawa also filed a $5.07 million claim for goods sold under the sensor purchase order, consisting of a $4.76 million unsecured claim and a $312,926 secured claim.
Specifically under the settlement, Furukawa has agreed to make a $16.5 million settlement payment to DAS, to withdraw a $2.6 million claim and to reduce the amount of another claim to $4.87 million from $5.07 million.
As a result, Delphi said the settlement will allow it to recover $16.5 million, reduce claims against its estates by more than $2.7 million and terminate costly litigation.
The settlement also resolves a series of Furukawa cure amount objections and calls for the withdrawal of the sensor agreement breach lawsuit, the motion said.
A hearing is scheduled for Aug. 26.
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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