Delphi creditors vote against deal

NEW YORK (AP) — The majority of Delphi Corp.’s creditors have voted against a deal that would allow the auto supplier to be acquired by private-equity firm Platinum Equity and possibly emerge from bankruptcy protection.

Of the 17 classes of creditors, 10 voted against the plan, two voted for it and five didn’t vote, according to court documents filed late Monday.

Delphi has said that if it cannot persuade its creditors to support a deal with Platinum or another party before a hearing set for Thursday, it would resort to a 363 sale, which refers to the section of the bankruptcy code that outlines the process for an auction of assets that the court oversees.

Under a deal reached last month, Beverly Hills, Calif.-based Platinum would acquire most of Troy, Mich.-based Delphi’s businesses with the help of billions of dollars in aid from General Motors Corp.

In exchange, GM would get certain parts of Delphi, including its Saginaw, Mich.-based steering business, and much-needed assurance of a steady supply of the parts it needs to produce its cars and trucks. Other “noncore” plants and assets would be sold off over time.

Delphi, which was GM’s parts division before being spun off in 1999, filed for Chapter 11 in October 2005. It still produces about 10 percent of the parts used in GM’s global production and its components go into nearly all of GM’s North American production lines.

But many of Delphi’s lenders have balked at the deal, calling it a “secretly negotiated transaction” that violated Delphi’s obligations to maximize the value of the lenders’ investment.

The lenders can still submit their own credit bid for the company, which would involve them forgiving the combined $3.45 billion in debt that is owed to them.