Delphi Shafts Suppliers, Union; Executive Bonuses Escape Unscathed
When former GM division and bankrupt parts supplier Delphi tried to get their re-organization plan approved by a federal judge earlier this month, shareholders and creditors panned it. In the last filing, Delphi's top brass wanted to cut the shareholders' recovery from $470m to $69m. The latest revision ups the pay-off to $190m. To make that happen, Delphi
looted took money from the right to purchase stock assigned to the United Auto Workers (UAW) and other unions– reducing the UAW's cut by 6.4m shares. Even so, creditors aren't happy with the new plan. But they're caught by the short hairs; they lose everything if Delphi goes under. The clincher: if the new new new plan isn't in place by December 31, Delphi's IRS waiver expires. Delphi would have to cough-up $1.4b for taxes and penalties on pension obligations. Other disclosures from the filing: their legal expenses have topped $320m and could reach as high as $400m. And they're capping the agreement to supplement some long-term employees' retirement plans. Oh, and they're still going to give their top executives at least $216m in bonuses, post-bankruptcy.
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