Delphi shareholders request emergency appointment to equity committee before CBA rejection hearing

By Caroline Salls

Pittsburgh, May 3 - Delphi Corp. shareholders asked the U.S. Bankruptcy Court for the Southern District of New York to order the company's U.S. Trustee to appoint them to the official committee of equity security holders, according to a Wednesday court filing.

The shareholders include Appaloosa Management LP, Wexford Capital LLC; Pardus Capital Management LP and Lampe Conway & Co., LLC.

According to the motion, rather than forming an equity committee from Delphi's largest, "the U.S. Trustee instead adopted the unprecedented, costly and time-consuming procedure of soliciting all of Delphi's over 300,000 shareholders for committee membership."

As a result, the committee was appointed on April 28 and is made up of seven members, including two institutional investors and five individuals.

"Conspicuously missing from the roster was Appaloosa and the other shareholders."

The shareholders said the U.S. Trustee's failure to even make an inquiry to Appaloosa and the others regarding their request to serve on the equity committee is troubling given the size of their holdings, their willingness to serve and the bankruptcy code provision that equity committees should ordinarily consist of the seven largest shareholders.

According to the motion, "resolution of labor issues will have a significant - if not decisive - impact on the interests that the shareholders should be given the opportunity to protect."

As a result, the shareholders requested emergency approval of their motion in light of the May 9 hearing to consider rejection of the company's collective bargaining agreements and elimination of retiree benefits.

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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