Delphi, unsecured creditors ask court to deny examiner appointment motion

By Caroline Salls

Pittsburgh, Sept. 17 - Delphi Corp. and its official committee of unsecured creditors objected to a noteholders' motion for appointment of an examiner for Delphi's Chapter 11 bankruptcy case, according to Tuesday filings with the U.S. Bankruptcy Court for the Southern District of New York.

According to the committee's objection, the court is not required to appoint an examiner because a plan of reorganization has already been confirmed in Delphi's bankruptcy case.

In addition, the committee said "the downside to appointing an examiner at this stage vastly outweighs the upside," as appointment of an examiner would distract all parties from the company's motion to approve an amendment to the global settlement agreement and master restructuring agreement with General Motors Corp.

"Quite simply, because the debtors seek in that motion to grant GM an administrative expense claim measured in the billions of dollars and a general release, the determination of what recoveries general unsecured creditors might receive in these cases will hinge on the outcome of that motion, regardless of whether or not an examiner is appointed," the committee said in its objection.

As a result, the committee said appointment of an examiner would most likely only delay the company's bankruptcy case and increase expenses without providing any benefit to the company or its creditors.

Meanwhile, Delphi said the motion filed by noteholders CR Intrinsic Investors LLC and Highland Capital Management LP was filed in bad faith because the noteholders "have waived their right to seek the appointment of an examiner based on their prior conduct in these Chapter 11 cases."

In addition, the company agreed with the committee's contention that an examiner should not be appointed because Delphi's plan of reorganization has already been confirmed.

Delphi called the noteholders' motion "a guerilla tactic that should not be tolerated."

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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