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Delphi Files for IPO

Once-bankrupt supplier hoping to raise millions, possibly billions, through stock offering.

by on May.31, 2011

Delphi CEO Rodney O'Neal prepares to take the supplier public again.

Delphi Corp., which endured the longest corporate bankruptcy in U.S. history, has filed with the Securities Exchange Commission asking for permission to sell shares through an initial public offering that plays up the company’s potential for growth in China and other overseas markets.

Delphi filed for bankruptcy in 2005 in a bid to scrap what it described as an unsustainable business model that included a heavy reliance on its former parent, General Motors, and a large manufacturing base in the United States. The bankruptcy wiped up Delphi’s old shareholders and left the company’s salaried pension fund in the hands of the Pension Benefit Guarantee Corp.

The Troy-based automotive supplier spent four years under Chapter 11 protection before emerging from bankruptcy in October 2009 with a much smaller manufacturing presence in the U.S. and a focus on supplying high-tech componentry, including safety equipment, fuel-management and electronics.

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The new Delphi is now counting on growth in the automotive market in the next few years to impress would be investors.

Global vehicle production is forecast to grow at a compound annual growth rate of 6.8% from 2010 to 2015. In the near-term, the mature markets, including North America and Western Europe, are expected to grow at 3.3%, from 2010 to 2015, for an increase of approximately 6.9 million units, while the emerging markets are forecast to grow at 10.3%, during the same period, for an increase of approximately 22.2 million units.

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Delphi’s Battenberg Cleared of Fraud but Guilty of Three Other Charges

Will pay substantial fines but serve no jail time.

by on Jan.13, 2011

Former Delphi Chief Battenberg found guilty on three charges, cleared on a fourth.

The long trial of former Delphi Chairman and Chief Executive Officer J.T. Battenberg ended with a jury clearing him of fraud – but he was still found him liable for misrepresentation and responsible for accounting errors involving a $237 million payment the supplier made to former parent General Motors.

The Securities and Exchange Commission’s civil complaint against Battenberg alleged that the former Delphi CEO had tried to hide the Dephi’s financial condition in order to improve its performance in the market.

Battenberg faced only civil, rather than criminal charges.  He nonetheless sought vindication via a jury trial but now faces a substantial fine and possibly other sanctions.

He faces no jail time but could be barred from serving on the board of any publicly traded company on top of those fines.  It was a serious rebuke to an executive who was considered one of Detroit’s major corporate stars during the 1980s and 1990s.

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Former Delphi CEO Battenberg’s Trial Wrapping Up

Prosecutors claim exec misled investors before Delphi bankruptcy.

by on Jan.06, 2011

Did former Delphi Chief J.T. Battenberg - shown here at a 2003 conference - mislead investors?

Did the former chief executive of mega-supplier Delphi intentionally mislead investors even as the company was spiraling down towards bankruptcy? That’s the key question as the long federal trial of J.T.Battenberg former Delphi chairman and CEO wraps up, with both defense attorneys and prosecutors laying out their final arguments.

The Securities and Exchange Commission’s civil complaint against Battenberg charges that the former Delphi executive – who retired as the company collapsed — set out to hide Delphi’s financial woes.

Battenberg faces no jail time but could be barred from serving on the board of any publicly traded company — and be forced to pay substantial fines.  It also would serve as a severe rebuke to an executive who was considered one of Detroit’s major corporate stars during the 1980s and 1990s.

The SEC’s prosecutors have hammered on the idea that Battenberg deliberately deceived outside investors about the handling of an item in the company financial filings in the years before Delphi filed for bankruptcy in 2005. (The company only emerged from Chapter 11 protection last year, marking the longest corporate bankruptcy in U.S. history.)

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Delphi Pension Dust-Up Under Federal Investigation

Did undue political influence cost many retirees their pensions?

by on Sep.15, 2010

Former Delphi CEO Steve Miller initially promised to keep both blue- and white-collar pension programs once he got the partsmaker out of Chapter 11.

A new federal investigation is underway, looking at whether undue political influence ultimately cost thousands of Delphi retirees a large chunk of their pensions.

An independent counsel has been brought in to review a controversial decision by the Pension Benefit Guarantee Corp., or PBGC, to assume control of the Delphi Corp. salaried pension program as the supplier finally emerged from its long run through bankruptcy.

Neil M. Barofsky, a special inspector general for the Troubled Asset Relief Program, said, in a letter to a New York congressman, that his office would examine whether officials from the Treasury Department’s automotive task force — or the White House — pressured General Motors to protect the pensions of Delphi’s blue collar workers, while the PBGC slashed the pensions of salaried employees.

Barofsky said his office would try to determine whether political considerations played any role in the decisions, “favoring hourly over salaried retirees.”

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There’s no question there were a lot of vested parties desperately hoping to drag Delphi out of its Chapter 11 quagmire, last year, the longest any major industrial company had ever been caught in the bankruptcy process.

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