Delphi auction, plan hearing postponed, deal agreed with note trustee

By Caroline Salls

Pittsburgh, July 21 - Delphi Corp. has postponed its auction to July 24 from July 21, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As a result, the hearing on approval of the company's modified reorganization plan was pushed back to July 29 from July 23.

In addition, Delphi said it has reached agreement with the official unsecured creditors' committee and Wilmington Trust Corp., the indenture trustee for several series of unsecured notes, to withdraw their objections to and support its modified reorganization plan.

The support applies whether the modified plan is based on the agreement involving Platinum Equity LLC and GM Components Holdings, LLC or the pure credit bid submitted by the administrative agent on behalf of Delphi's DIP lenders.

The company said the decision to postpone the auction and hearing was made following a chambers conference held Tuesday with Delphi, its official committee of unsecured creditors, General Motors Corp. and all potential bidders.

As previously reported, Delphi said earlier this month that the deadline for submission of potential alternative transactions to the offer received June 1 by Platinum Equity LLC affiliate Parnassus Holdings, LLC and GM Components Holdings, LLC had passed without any alternative offers from the three bankruptcy court-approved third-party qualified bidders.

Although no alternative transactions were submitted, Delphi said it had received a notice that credit agreement administrative agent JPMorgan Chase Bank, NA will submit a credit bid.

The outcome of the auction is expected to be announced on July 27.

Unsubordinated creditors get more

Under the agreement with the unsecured creditors' committee and Wilmington Trust, Delphi will modify its current plan so that potential distributions to unsubordinated general unsecured creditors under the waterfall schedule will be increased to a maximum of $300 million from a maximum of $180 million and will be based on 32.5% of all waterfall distributions in excess of $7.2 billion.

Delphi also agreed that reasonable fees and expenses of Wilmington Trust, including the reasonable fees and expenses of its retained counsel, will be paid up to an agreed cap.

PBGC agreement

In addition, Delphi said it reached agreement with the Pension Benefit Guarantee Corp. to settle its various claims against Delphi.

The PBGC will receive a $3 billion allowed general unsecured non-priority claim which will receive the same treatment given to holders of general unsecured claims. The PBGC will receive additional consideration from GM.

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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