Bankruptcy

Sold for Parts? Delphi Pays Out $145M

The troubled company incurred the professional fees and expenses during its first year after filing for bankruptcy protection.
Stephen TaubFebruary 15, 2007

A federal bankruptcy judge has approved $135 million in professional fees and $10 million in expenses for lawyers and financial advisers working on behalf of Delphi, according to the Associated Press.

The auto-parts maker reportedly incurred the $145 million in fees and expenses between October 8, 2005, when it filed for bankruptcy protection, and the end of last September.

The payment applications were filed by about 30 law firms, bankers, and other advisors, reported the AP. One of Delphi’s biggest advisers, the wire service noted, is law firm Skadden, Arps, Slate, Meagher & Flom, which recorded fees and expenses of $32.79 million for the year.

The wire service pointed out that the firms have already received most of the fees; the approval by U.S. Bankruptcy Judge Robert Drain covers the 5 percent to 10 percent that has been held back.

Last month, Judge Drain approved a financing plan between Delphi and an investor group that has pledged to pump as much as $3.4 billion into the company.

Under the plan, affiliates of investors Appaloosa Management, Cerberus Capital Management, and Harbinger Capital Partners, as well as Merrill Lynch and UBS Securities, reportedly have the right to buy shares in a restructured Delphi for $1.4 billion to $3.4 billion.

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