SOURCE: Delphi Corporation

August 31, 2007 16:12 ET

Delphi Reaches Settlement Agreements of Class Action Lawsuits

TROY, MI--(Marketwire - August 31, 2007) - Delphi Corp. (PINKSHEETS: DPHIQ) has reached a settlement agreement with the lead plaintiffs in class action lawsuits brought by participants in its employee retirement plans and purchasers of its debt and equity securities from March 2000 to March 2005.

Under the settlement agreements, which remain subject to federal bankruptcy court and federal district court approval, the class of participants in Delphi's employee retirement plans will receive an allowed interest in Delphi's Chapter 11 case in the amount of $24.5 million and $22.5 million in cash from insurance carriers. Additionally, the class of purchasers of Delphi's debt securities will receive an allowed claim and the class of purchasers of Delphi's equity securities will receive an allowed interest in the combined amount of $204 million in Delphi's Chapter 11 case as well as approximately $90 million in cash from other defendants and insurance carriers. The allowed amounts in Delphi's Chapter 11 cases will receive the same plan currency and the same treatment as Delphi's general unsecured creditors.

The lawsuits followed the company's announcement in March 2005 that it would restate its financial results. These settlements would resolve these class-action lawsuits against Delphi and certain of the other defendants in the lawsuits. The final settlements provide a dismissal with prejudice of these class action lawsuits and a full release as to certain named defendants, including Delphi, Delphi's current directors and officers, and certain third-party defendants and will also resolve certain derivative and other claims in Delphi's chapter 11 cases.

"Last year, Delphi settled with the Securities and Exchange Commission, and now we are pleased to have reached settlement agreements in these cases, which we believe will allow us to close this chapter in our history and move forward," said David M. Sherbin, Delphi vice president and general counsel. "This is another important step in our transformation process, which ultimately brings us closer to emergence from bankruptcy."

These settlements are subject to the approval of the U.S. District Court for the Eastern District of Michigan and the U.S. Bankruptcy Court for the Southern District of New York. The District Court has scheduled a hearing on Nov. 13, 2007 to consider final approval of the settlements. Delphi expects to file an approval motion in the U.S. Bankruptcy Court on Sept. 7, 2007, which would be scheduled for final hearing at the Sept. 27, 2007 omnibus hearing.


This press release, as well as other statements made by Delphi, may contain forward-looking statements that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the debtor-in-possession financing facility; the terms of any reorganization plan ultimately confirmed; the Company's ability to obtain Court approval with respect to motions in the chapter 11 cases prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; the Company's ability to satisfy the terms and conditions of the new Equity Purchase and Commitment Agreement; risks associated with third parties seeking and obtaining Court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the chapter 11 cases on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan (including the transformation plan described in Item 1. Business "Potential Divestitures, Consolidations and Wind-Downs" of the Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC) and to do so in a timely manner; the ability of the Company to attract, motivate and/or retain key executives and associates; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees and the ability of the Company to attract and retain customers. Additional factors that could affect future results are identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, including the risk factors in Part I. Item 1A. Risk Factors, contained therein and the Company's quarterly periodic reports for the subsequent periods, including the risk factors in Part II. Item 1A. Risk Factors, contained therein, filed with the SEC. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.

Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various prepetition liabilities, common stock and/or other equity securities. Additionally, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy cases to each of these constituencies. A plan of reorganization could result in holders of Delphi's common stock receiving no distribution on account of their interest and cancellation of their interests. In addition, under certain conditions specified in the U.S. Bankruptcy Code, a plan of reorganization may be confirmed notwithstanding its rejection by an impaired class of creditors or equity holders and notwithstanding the fact that equity holders do not receive or retain property on account of their equity interests under the plan. In light of the foregoing, the Company considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in Delphi's common stock or other equity interests or any claims relating to prepetition liabilities.

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