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http://biz.yahoo.com/ap/060906/gm_delphi.html?.v=2
NEW YORK (AP) -- General Motors Corp. owes $26 billion to Delphi Corp., an investor committee for the auto parts maker said in a bankruptcy court filing.
The committee representing shareholders at Delphi said in papers filed late Monday that its calculation shows the automaker has obligations to its biggest supplier, which was spun off from GM in 1999.
GM, for its part, has filed an unsecured multibillion-dollar claim against Delphi, the Troy, Mich.-based supplier said in papers filed last month. The automaker aided Delphi in funding buyout programs for members of its two biggest unions, though it retained the right to recoup those contributions once Delphi emerges from court protection.
The equity committee made the assertion in a document to oppose a motion brought by Delphi's bondholders that will be considered Sept. 14. Judge Robert Drain of the Southern District of New York is scheduled to consider a request from the creditors committee whether it can sue GM and certain former Delphi executives.
The creditors committee said, and the equity committee agreed, that GM used the spin-off to pass on certain retirement, health care and labor costs to Delphi, crippling it and eventually pushing it into bankruptcy. But the bondholders have also asked for a more significant role in ongoing negotiations between GM, Delphi and labor unions.
The power of those three contingents, St. John's University Professor Anthony Sabino said, has pushed even the creditors' committee to the margin, while the equity committee retains its place as the last to collect anything. He said shareholders may garner some attention from the judge, but that may not mean much.
"Shareholders are absolutely, positively last in line," Sabino said. "The minute a company enters bankruptcy, assume you have lost every penny. It's only a rare miracle when shareholders get anything."
Meanwhile, Delphi seeks the right to abandon certain supply contracts it has with GM. A hearing on that motion is scheduled to begin Sept. 28.
NEW YORK (AP) -- General Motors Corp. owes $26 billion to Delphi Corp., an investor committee for the auto parts maker said in a bankruptcy court filing.
The committee representing shareholders at Delphi said in papers filed late Monday that its calculation shows the automaker has obligations to its biggest supplier, which was spun off from GM in 1999.
GM, for its part, has filed an unsecured multibillion-dollar claim against Delphi, the Troy, Mich.-based supplier said in papers filed last month. The automaker aided Delphi in funding buyout programs for members of its two biggest unions, though it retained the right to recoup those contributions once Delphi emerges from court protection.
The equity committee made the assertion in a document to oppose a motion brought by Delphi's bondholders that will be considered Sept. 14. Judge Robert Drain of the Southern District of New York is scheduled to consider a request from the creditors committee whether it can sue GM and certain former Delphi executives.
The creditors committee said, and the equity committee agreed, that GM used the spin-off to pass on certain retirement, health care and labor costs to Delphi, crippling it and eventually pushing it into bankruptcy. But the bondholders have also asked for a more significant role in ongoing negotiations between GM, Delphi and labor unions.
The power of those three contingents, St. John's University Professor Anthony Sabino said, has pushed even the creditors' committee to the margin, while the equity committee retains its place as the last to collect anything. He said shareholders may garner some attention from the judge, but that may not mean much.
"Shareholders are absolutely, positively last in line," Sabino said. "The minute a company enters bankruptcy, assume you have lost every penny. It's only a rare miracle when shareholders get anything."
Meanwhile, Delphi seeks the right to abandon certain supply contracts it has with GM. A hearing on that motion is scheduled to begin Sept. 28.
