Delphi Corp. officials will meet in Washington on Monday with officials from General Motors and the presidential auto task force to discuss a plan for the supplier to leave Chapter 11 reorganization after more than three years.
Plans for the meeting were revealed at a hearing Thursday in U.S. Bankruptcy Court in New York, Delphi spokesman Lindsey Williams said.
In addition, Judge Robert Drain set an April 17 deadline for the company to file a term sheet that reflects discussions between Delphi, its lenders, the U.S. Treasury and GM.
Delphi had arranged financing to emerge from bankruptcy in April 2008, but those plans collapsed when New York financier Appaloosa Management LP pulled out of the deal on closing day.
Representatives from Delphis creditors committee and the lenders of the bankruptcy financing will attend Mondays meeting, Williams said.
Delphi lawyer Jack Butler said the planned meeting was very good news for parties in the bankruptcy because it would establish a consensus on the timetable for developing a plan.
On Wednesday, the auto task force filed a motion seeking to block a GM-Delphi agreement that would have provided the parts maker access to $150 million, contingent on Delphis selling its steering business to GM.
The Treasury Department has the right to object to large GM transactions as part of a $13.4 billion emergency loan it extended to the automaker at the end of 2008. GM had requested as much as $16.6 billion in additional federal loans.
On Monday, President Barack Obama rebuffed that plea, which had included a request for an undisclosed amount of aid to Delphi. Obama gave GM 60 days to revise its restructuring plan and threatened that bankruptcy was an option if the new results werent satisfactory.
Delphi CEO Steve Miller said last week that the U.S. bankruptcy system is ill-equipped to handle bankruptcies of large corporations such as Delphi, let alone an automakers restructuring.
Bankruptcy is a lengthy, destructive process, Miller said. It is enormously wasteful of resources, and its therefore not a good approach.
Settlement with white collar workers
Separately, the bankruptcy court also approved Delphis motion to pay white-collar retirees nearly $9 million in a settlement over the elimination of their benefits.
Last month, Delphi had received bankruptcy court approval to eliminate the retirees health care and life insurance benefits. The changes were to take effect Wednesday, April 1. Those moves would erase more than $1.1 billion in liabilities from Delphi's balance sheet, the supplier said.
But the retirees received from the court a 60-day emergency stay of the benefits elimination, which would have cost Delphi as much as $12 million, Delphi said in court documents. If the retirees won more stays or prevailed in appeals courts, Delphi would lose millions more, the supplier said.
So Delphi settled quickly, it said, agreeing to put $8.75 million into a fund for the retirees. That will erase the emergency stay.
Reuters contributed to this report