Delphi Creditors Seek Court’s OK to Sue General Motors

[1931Chevy]

http://www.business-journal.com/Delp...eekOKSueGM.asp
NEW YORK -- The committee representing unsecured creditors of Delphi Corp. took a step toward filing a billion-dollar lawsuit against General Motors Corp. Thursday, asking a bankruptcy court here to authorize the committee to file a draft lawsuit under seal.

The purpose of the suit, the committee said in the filing, is to ensure the committee “has a seat at the table” in ongoing negotiations between Delphi and GM concerning Delphi’s “transformation,” the cost-cutting restructuring plan it has adopted to shed workers and close plants.

The motion is scheduled to be heard Aug. 17 in U.S. Bankruptcy Court for the Southern District of New York.

The complaint centers on confidential investigations involving Delphi, among them the investigation by the U.S. Securities and Exchange Commission into allegations of fraud and financial mismanagement that led to the resignations of key Delphi executives, many of them directors of the company.

Thursday, U.S. Judge Robert E. Gerber issued an order authorizing the committee to file under seal exhibits to the committee’s motion. Gerber ordered the exhibits remain confidential until the court rules they be made public.

A Delphi spokesman told reporters late Thursday that the auto parts maker opposes the creditors’ motion because it is “not in the best interests” of the company.

In its filing, the committee charged that Delphi has excluded the committee from negotiations with GM “while reaching piecemeal agreements with GM under which the debtors have been agreeing to allow certain GM claims and to waive defenses to other GM claims.”

On May 11, the committee formally requested Delphi sue GM to recover billions of dollars in payments related to Delphi’s spin-off from GM in 1999. Acknowledging that Delphi owns that right to sue GM, the committee indicated in the spring that it was prepared to sue GM to recover those damages.

In Thursday’s filing, the committee stated that if the court allows it to initiate legal actions, “the result will be accelerated negotiations with a substantially greater opportunity for a mutually acceptable result.”

“The current path down which the debtors are taking the negotiations with GM will almost certainly lead to a protracted and potentially damaging litigation with the committee,” the committee declared.

View court filings in Delphi’s bankruptcy at www.delphidocket.com

[GReekBoy]

yea that makes alot of sense...lets sue the person who gives us the most business

[tom3]

"unsecured creditors" Might be stock holders who've seen their investments go to zero. They have nothing to lose at this point. If they can prove mismanagement or illegal activities they might get a few cents on the dollar for their worthless stock, and the lawyers will clean up of course.

[paul3230]

great! The timing couldn't have been better!

[61695]

Shakespeare was right. Kill all the lawyers.

[asim]

Gosh...they just suck.

[87aero]

Seems like it's one ordeal after another. The general doesn't have much luck. Who are these creditors anyway. Are they creditors who went SOL with the bankruptcy and thus trying to sue their money back or do they curently have credits against Delphi?

[steverino]

That's right sue the company that's going to be the one to bail you out of this mess.