Vincent Farnsworth 7:30 p.m., April 24
Platinum's Juicy, Subsidized Deal for Delphi Runs into Snag
Platinum Equity, the Beverly Hills private equity firm that bought the Union-Tribune for a song, has been trying a similar caper with bankrupt Delphi, the auto parts maker that once belonged to General Motors. GM, the government's auto task force and Platinum quietly put together a deal in which Platinum would get a large stake in Delphi by only plunking down an initial $250 million in cash and $250 million in a loan. GM, being subsidized heavily by the government, would make a $2 billion cash injection, make a $500 million loan, and also take on $1.6 billion of Delphi's pensions. But in bankruptcy court, Delphi's lenders screamed that there was to be no auction -- just this secret deal. The judge didn't like it either, saying, "They're (Platinum) just guys in suits. Why can't other guys in suits pay more?" According to the latest information, Delphi will have to conduct an auction. Possibly Platinum won't get that fat, subsidized deal.