San Francisco Bankruptcy Attorney comments on auto supplier Delphi’s emergence from bankruptcy.
San Francisco Bankruptcy Attorney comments on auto supplier Delphi’s emergence from bankruptcy.
Beleaguered auto supplier Delphi has emerged from bankruptcy after nearly four years in the Chapter 11 bankruptcy process. Delphi’s bankruptcy filing was the largest automotive industry bankruptcy in history when it was filed in 2005. Delphi, spun off from General Motors in 1999, supplies approximately 10 percent of General Motors parts for its new car assembly lines. General Motors has watched the bankruptcy process very closely due to parts shortage concerns.
Delphi Holdings LLP is the new holding company that has finalized its purchase of most of Delphi’s former assets, under the agreement negotiated with lenders and General Motors, who has agreed to provide billions in loans to the newly-formed Delphi.
The new Delphi has renegotiated labor agreements that have dramatically reduced its operating costs and make it more competitive with auto suppliers. During the bankruptcy process Delphi sold off a number of plants and cut thousands of jobs in its quest to become a viable concern despite the dramatic reductions in the auto industry.
Delphi nearly emerged from bankruptcy in 2008 but financing concerns and tight credit markets forced it to continue negotiations with lenders, who ultimately purchased control of most of the company’s assets in an 18-hour auction process in June, 2009.
Delphi Emerges From Bankruptcy, WFSB.com, October 6, 2009
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