Delphi has until May 21 to come up with Chapter 11 plan

NEW YORK (AP) — A federal judge ruled Thursday that auto supplier Delphi Corp. can have more time to come up with a plan to exit from bankruptcy protection, but acknowledged that the auto supplier's fate hinges on what happens to its former parent General Motors Corp.

Judge Robert Drain gave the Troy, Mich.-based company - which has been operating under Chapter 11 bankruptcy protection for more than three years - until May 21 to submit its plan to its lenders, the same day of Delphi's next scheduled court hearing. After that, the company's lenders will have until June 2 to weigh in.

Meanwhile, GM faces a government-imposed restructuring deadline of June 1. If the Detroit-based automaker fails to meet the government's requirements, it could be forced to join Delphi in Chapter 11 bankruptcy protection.

"I believe in light of all of this, the motion should be granted," Drain said. "Obviously, there's a tension in keeping the parties focused on a short term basis and the cost of that in amendment fees and in the stress that puts on the company."

GM has committed to supplying Delphi with hundreds of millions of dollars in funding since the supplier filed bankruptcy protection in 2005, in order to assure a steady supply of the parts GM needs to produce its vehicles.