Delphi seeks court OK of bid procedures for $6.5 million sale of MobileAria assets

By Caroline Salls

Pittsburgh, June 7 - Delphi Corp. requested court approval of the bidding procedures for the proposed $6.5 million sale of substantially all the assets of MobileAria, Inc. to stalking horse bidder Wireless Matrix USA, Inc., according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, although Delphi believes that MobileAria is a fundamentally strong business in an emerging and rapidly growing market, MobileAria's business does not fit in the company's anticipated product portfolio under its transformation plan.

Under the stalking horse purchase agreement, $975,000 of the purchase price will be placed into an escrow account to satisfy MobileAria's indemnification obligations.

The remaining available funds from the escrow will be released on the first anniversary of the sale closing, provided, however, that if the buyer has made an indemnification claim before then, the escrow agent will continue to hold that amount until the claim is resolved.

If Wireless Matrix is not the high bidder, MobileAria will pay it a break-up fee of 3% of the purchase price, plus $120,000 in expense reimbursement.

All bids must include a $500,000 deposit.

Bids other than Wireless Matrix's must be for more than the stalking horse bid, plus the amount of the break-up fee and $400,000.

Subsequent bids must be for at least $100,000 more than the previous bid, in increments of $100,000.

The auction will be held July 10. The sale hearing is scheduled for July 19.

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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