GM Demands Payment From Delphi

[Slowrider5]

General Motors files multibillion-dollar claim against Delphi

By Joseph Rebello
Last Update: 6:33 PM ET Aug 7, 2006

WASHINGTON (MarketWatch) -- Delphi Corp. (DPHIQ) said General Motors Corp. (GM) made a "multibillion-dollar" demand for payment against the struggling auto-parts company, which has been relying on GM's help to carry out its bankruptcy reorganization.
In papers filed with the U.S. Bankruptcy Court in Manhattan on Friday, Delphi said GM made the demand July 31 in a proof of claim filed against Delphi and its subsidiaries. Such filings are made by creditors of companies in bankruptcy proceedings. They constitute a formal demand for payment, although the claim is seldom paid in full.
Delphi, a former GM subsidiary that is also GM's biggest supplier, has said it has its own demands for payment to make against GM. Its creditors have estimated GM's debt to Delphi in the "billions of dollars" and have complained that Delphi has been slow in demanding payment from the world's biggest auto manufacturer.
Delphi, however, said now isn't the time to pick a fight with GM because a quarrel could jeopardize its reorganization effort. "GM's participation in Delphi's labor transformation is a strategic element of the reorganization," Delphi said in the papers filed Friday.
The company asked U.S. Bankruptcy Judge Robert Drain, who is overseeing Delphi's Chapter 11 reorganization, not to grant its creditors committee the right to sue GM on Delphi's behalf. Delphi said its board of directors intends to assert "some or all" of the company's demands against GM before an October 2007 deadline.


http://www.marketwatch.com/News/Stor...D1%7D&keyword=

[zackythekid]

so GM owes delphi or delphi owes GM?

-ZaC-

[tama z71]

waaaa?

[T-Type]

Someone who understands all the legality surrounding a bankruptcy needs to comment, but I think this is just one of those things that needs to be done to protect GM's interests. I don't think this is intended to be hostile. But that's just my 2 cents.

[mikesright]

This was planned for the beginning, all GM is doing here is asserting its right to be paid back after Delphi gets going again and can generate some cash. GM paid for half of the buyouts of Delphi workers, so GM is claiming that money against Delphi. Technically, GM isn't suing Delphi.

[cadillacpimpin]

so the debts cancel and the remainder is to be paid?
i wonder how much redundant financial transactions are conducted. especially between these two.

[Kheiron]

so filing a claim for payment constitutes "sueing someone"? Did not see this developing.

[rhvfd10]

So sad.... It should never have come to this.

[DuSpinnst]

Originally Posted by T-Type

Someone who understands all the legality surrounding a bankruptcy needs to comment, but I think this is just one of those things that needs to be done to protect GM's interests. I don't think this is intended to be hostile. But that's just my 2 cents.

Yep, if you read the article this "lawsuit" is part of GM having to pay Delphi for the buyouts.

I think the goal is to make GM's share of Delphi's debt, larger.

[TaHoE]

Fixed. GM actually never sued anyone yet.

[awalbert88]

IANAL, but this is just a legality of GM making sure that when Delphi emerges from bankruptcy that their debt to GM for the buyouts (and probably other financial ties during the past few months) is noted. Any transactions with a company in bankruptcy court have to be very carefully documented.

[61695]

Just lawyers arguing over money.

[quinnp12]

Financial mumbo jumbo. Can't they just see they owe this much and they owe that much and be done with it. Oh well, thats why I'm not a lawyer or accountant and never will be.

[Slack]

It sounds like this is just something that GM must supply to the bankruptcy court for Delphi to prove that they are indeed in dept. Hardly a hostile maneuver. Just a little red tape.

[01cavalier]

Originally Posted by mikesright

This was planned for the beginning, all GM is doing here is asserting its right to be paid back after Delphi gets going again and can generate some cash. GM paid for half of the buyouts of Delphi workers, so GM is claiming that money against Delphi. Technically, GM isn't suing Delphi.

Makes sense to me. I doubt GM will really get much out from it.