Delphi Shareholders' Committee Opposes New Bankruptcy Plan

The official shareholders' committee for Delphi Corp. said in a court filing it opposes the modified reorganization plan the bankrupt auto parts maker filed earlier this month.

In the plan, equity holders can participate only in a discounted rights offering. Delphi's original plan fell through in April when an investor group led by Appaloosa Management LP refused to make the $2.55 billion equity investment. In that plan, stockholders were to receive new shares and warrants.

Also in the new plan, Delphi's unsecured creditors would recover 38.8% of their investment, compared with a 100% recovery under the original plan.

Delphi plans a hearing on Dec. 17 to consider approving changes in its bankruptcy plan and authorizing an emergence from Chapter 11. By dien, Delphi will have been in bankruptcy reorganization for 38 months.

Delphi's shareholders' committee said in its recent court filing that the company's new plan doesn't "provide existing equity with just compensation for the harm and damage caused" by General Motors Corp., Delphi's former parent company. Stockholders said the new plan "wrongfully forfeits value that belongs to existing equity."

The committee calculates that GM is contributing $10.6 billion to recapitalizing Delphi under the amended reorganization structure. The equity committee wants a "fair and appropriate" portion of GM's contribution.

Delphi, the former auto-parts division of GM, was spun off as a separate company in 1999. It began the Chapter 11 reorganization in October 2005, listing $19.1 billion in debt.

- Bloomberg News