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Delphi shareholders withdraw request to enlarge equity committee after additional member added
By Caroline Salls
Pittsburgh, May 30 - Delphi Corp. shareholders withdrew their request to enlarge the official committee of equity security holders following the U.S. Trustee's appointment of an additional member, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
The trustee appointed Pardus Capital Management, LP on May 11.
The shareholders that made the request 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.
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."
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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