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December 12, 2007 |
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DELPHI CORP: Noteholders Balk at Revised Disclosure Statement Eight holders of Senior Notes in Delphi Corp. asks the United States Bankruptcy Court for the Southern District of New York to Reject the revised Disclosure Statement explaining the Debtors' Joint Chapter 11 Plan of Reorganization filed on Dec. 3, 2007. As reported in the Troubled Company Reporter on Dec. 6, 2007, the Debtors said it has reached agreements in principle with its Official Committee of Unsecured Creditors, its Official Committee of Equity Security Holders, General Motors Corp. and its Plan Investors on amendments to its Joint Plan of Reorganization, Global Settlement Agreement and Master Restructuring Agreement between Delphi and GM, and the Investment Agreement with Delphi's Plan Investors led by an affiliate of Appaloosa Management L.P. Delphi filed potential amendments to all four documents on Monday evening in the United States Bankruptcy Court for the Southern District of New York as revisions to the company's Disclosure Statement and appendices to the company's Disclosure Statement. Holders of Delphi Corp. Senior Notes: -- Caspian Capital Advisors, LLC; -- Castlerigg Master Investments Ltd.; -- CR Intrinsic Investors, LLC; -- Davidson Kempner Capital Management LLC; -- Elliott Associates, L.P.; -- Everest Capital Limited; -- Nomura Corporate Research & Asset Management, Inc.; -- Northeast Investors Trust; -- Sailfish Capital Partners, LLC; and -- Whitebox Advisors, LLC, maintain that the Disclosure Statement should not be approved because the Joint Plan of Reorganization: * classifies dissimilar claims in the same class in violation of Section 1122(a) of the Bankruptcy Code; * provides different treatment to claims classified together within a single class in violation of Section 1123(a)(4); * does not enforce the subordination agreement between the Senior Notes and TOPrS Claims by lumping the claims in one class in violation of Section 510(a); and * is premised on a substantive consolidation of the Debtors, solely for voting and distribution purposes, that the Debtors are unable to justify. "None of these issues have been addressed by the most recent amendment to the Disclosure Statement filed by the Debtors on Dec. 3, 2007," Allan S. Brilliant, Esq., at Goodwin Procter LLP, in New York, contends. Mr. Brilliant argues that although the Debtors have attempted to provide a more fulsome disclosure regarding several aspects of the Plan, the information in the current proposed Disclosure Statement remains wholly inadequate to enable creditors to make an informed judgment about the Plan as required by Section 1125. The Senior Noteholders maintain that the Disclosure Statement lacks adequate disclosure and information: -- on the implications of the value of the New Common Stock and the range of recoveries afforded to General Unsecured Creditors under the Plan; -- contained in the valuation analysis; -- on the economic interests and involvement of the Plan Investors and General Motors Corp. in "negotiating" the Plan; -- on the Plan's proposed treatment of intercreditor rights; -- on the potential impact to creditors of the Debtors' present lack of committed exit financing; -- regarding substantive consolidation; -- on the GM Claim; -- on releases under the Plan; and -- on the Multi-District Litigation Settlements between the Debtors and plaintiffs in the consolidated Securities Litigation. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/ -- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and USUS$23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) |
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