US bankruptcy judge Robert Drain today is expected to rule that Delphi can sell its assets to a group of lenders and emerge from Chapter 11 protection after almost four years.
The supplier’s board earlier this week accepted a bid from from debtor-in-possession (DIP) lenders to take over much of its operations in return for the forgiving of almost $3.5bn in loans.
Judge Robert Drain’s Wednesday hearing in New York overruled most of the objections to the deal from union groups concerned about workers’ pensions, and various state tax and workers compensation agencies, noting the potential added costs to Delphi and its investors.
“Neither GM nor the DIP lenders have an open wallet,” he said.
He will hear closing arguments on Thursday and warned he saw no need for long statements from the lawyers.
He felt Delphi, GM and its lenders had been “pursuing a path that’s consistent with good business judgment.”
Delphi’s top lawyer Jack Butler told Reuters after the hearing that subject to court approval, Delphi hoped to close the sale by the end of the third quarter and was targeting 31 August.
Provate equity firm Platinum Equity Capital Partners has earlier tried to take over Delphi in conjunction with GM and with the backing of the US government auto task force.
It now wants reimbursement of the US$30.5m it spent on its proposal.