Delphi in talks to emerge from bankruptcy

Posted on Friday, May 29th, 2009 at 2:24 PM EDT.

Delphi Corp., the auto parts maker that has been in bankruptcy proceedings for the last four years, may finally emerge from Chapter 11 and avert liquidation, the New York Times reported.

As Delphi’s one-time parent, General Motors, lays the final groundwork for its own bankruptcy filing, the Obama administration’s auto task force is pushing for a sale of at least some Delphi assets to a third-party buyer, possibly another parts supplier or an investment firm, according to people briefed on the matter who spoke to the Times on the condition of not being named.

GM, still a major Delphi customer, might reacquire some assets as well, these people said. As part of its reorganization, GM has agreed to take back five Delphi plants, although the terms of that transaction have not been settled.

By selling some or most of its assets, Delphi would avoid a wholesale liquidation, a dismal end that would leave its creditors with little or nothing to recover, the story said. The government had prepared for that possibility, with GM acquiring the plants and equipment it would need for its operations through a fire sale of Delphi assets, the paper said. (The New York Times)

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