Delphi Sues Investors for Bailing on C11 Rescue Plan

delphi sues investors for bailing on c11 rescue plan

Can a guy get weekend off? Jeez. You put your proverbial pen down for five minutes and the next thing you know Automotive News is tossing the alerts at you like a Vegas knife thrower. Most of the time, it's GM trying to sneak in some bad news (e.g. Rick Wagoner's $14.4m pay packet) while non-OCD reporters and stock market traders pursue what's euphemistically called "a life." OK, so, first up: auto supplier Delphi have sued investors Appaloosa [AN, sub] and eight co-conspirators for walking away from a bankruptcy exit plan for the troubled (and how) former GM division. "Delphi is alleging a breach of contract and fraud, and is asking the court to provide up to $2.55 billion in equity funding and to pay compensatory and punitive damages in an amount to be determined at trial." (Of course, that's just bad writing; the court doesn't have $2,55b. But you get the idea.) Any such court case would ehance Delphi's United Auto Workers' ire and feed TTAC's grist mill; like this little gem from Delphi Veep David Sherbin. "The plan investors vigorously pursued a prominent role in our restructuring, received over $60 million in fees for their commitments." Wow! Add in the lawyers fees– which could easily eclipse that amount– and there's no question Delphi's ignoring the wise British maxim "When you're in a hole, the first thing you do is stop digging." In any case, once again, it looks like a GM – Delphi bailout could well be the cash burn that finally sets The General's hair on fire, helping secure their seat next to Delphi in federal bankruptcy court. Next up: the UAW "settlement" at American Axle…

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  • Jolo Jolo on May 18, 2008

    $12 million a month for bankruptcy lawyer fees is what Delphi pays. That is why they wanted to be done by the end of 2007, then the 1st quarter of 2008 and finally by the end of April 2008, which they were. Appaloosa didn't like GM's potential influence on Delphi due to the amount they were kicking in and used it as an excuse to bail, all the while telling Delphi they owed them ~$82 million. What will happen is that they will drop all claims against each other and it will be over. GM won't let Delphi go chapter 7 because it would take GM too long to second source all of Delphi's parts that they have in almost all their vehicles. GM would have no choice but to go Chapter 7 if that happens.

  • AMXtirpated AMXtirpated on May 19, 2008

    Highland Capital could not be reached for comment, given they were laughing too hard.

  • DenverMike Pininfarina I know it's not related to this, I just like saying it.
  • Matt Posky I don't understand the appeal of fake meat and this seems to operate under a similar premise: You don't want the V8 because someone says it's bad for you. But you can have something designed to mimic the experience because that's what your body actually wants. The styling is cool I guess. But I don't understand why EVs don't just lean into what they are. Companies can make them produce any wooshing or humming noises they want. Buiding an entire system to help you pretend it still has a combustion engine seems a little lame.
  • DenverMike I'm sure it would have a volume control. It's nice to sneak into my neighborhood at 2am quietly. Or creep out, 4am. I don't get much sleep OK, but I always keep my V8 exhaust stock, as much as I love the sound of others loud. My stereo would make it pointless anyway.
  • FreedMike I’d love to see more tracks, or off-road parks if that’s your jam. But for those of us who’d love to take part in this kind of thing, practicality is the limiting factor. Racing has always been expensive, and most people don’t want to do it with their daily drivers - I’d love to see what my GLI would do on a track, but not at the cost of voiding my warranty, or potentially wrapping up the car (which I’m pretty sure would put me on State Farm’s Keith Moon-trashing-the-Holiday Inn list). As a practical matter, you have to have a vehicle that is intended to be used for racing, and the ability to fix it; most folks don’t have that kind of money or skill set.
  • Dukeisduke Oh, so it *is* a hatchback. Last night, I watched the replay of the reveal with Tim Kuniskis presenting the car, on Instagram. A "fly-through" of the car on the pre-rollout video made it look like they were going through an open hatch, so it had me wondering. The car attracted a lot of negative comments on IG, on feeds of guys who were there live.This is probably the least "electric car" electric car.