*Defending Platinum deal

The big auto supplier Delphi has gotten heat from its lenders for cutting a deal with Platinum Equity, the Bev Hills-based private that's controlled by billionaire Tom Gores. The group claims that the sale leaves them less than whole and gives Platinum a fat discount. So Delphi, in the middle of bankruptcy proceedings, came back this morning with a filing that lays out the circumstances of the sale - along with the reasons why it should reimburse Platinum $30 million for due-diligence costs. Here's a copy of the Delphi filing. Trust me, it's waaay more than you want to know, but the transaction does point to Platinum's penchant for bottom feeding (this is the same outfit that purchased the struggling San Diego Union-Tribune). From DealBook:

Many of these lenders, including several hedge funds, argue that they weren't apprised of the terms Delphi was negotiating with Platinum. They also questioned why the private equity firm was selected. "The proposed transaction was secretly negotiated with G.M., Platinum and the U.S. Treasury's auto task force -- while a court-ordered mediation was in process -- without anything remotely resembling a proper mergers and acquisition process," one group of these lenders, which hold about $800 million of the DIP, wrote in its objection.

[CUT]

Originally, Platinum had sought to acquire Delphi's steering business, an operation that G.M. eventually chose to take back. But the private equity firm eventually expressed interest in acquiring the bulk of Delphi's assets.[John Sheehan, Delphi's chief financial officer], describes a string of meetings involving Delphi, G.M., the DIP lenders and the Obama administration's auto task force, primarily between March and June.

Don't be surprised if at some point down the road a similar skirmish breaks out between Tribune Co. and its lenders over any possible sale of the LAT. The bidders who eventually emerge will want a deep discount, perhaps deeper than the banks holding all that Tribune debt are prepared to stomach. Yes, that does jump the gun a bit - Tribune is still going through the bankruptcy process, and there's no official word that the company will be broken up. But it's hard to imagine how the place could emerge in one piece after the reorganization is approved.

*Update: Dan Krasner, Senior Vice President of Platinum Equity Advisors, says the firm has the wherewithal to handle a Delphi purchase. From his decalaration:

Platinum has expended extensive efforts to convey to all of Delphi's stakeholders that it has the operational resources and know-how to lead a restructuring of Delphi to bring it to long-term profitability, and that what Platinum is not just a run of the mill financial buyer. Rather, what Platinum truly brings is a diligenced, vetted operating plan for Delphi, the resources to execute on that plan, the trust and support of Delphi's major stakeholders, the track record and experience to institute a turn-around at Delphi and the financial resources to invest in that effort. We do not believe that any other party or firm can provide near this level of value to Delphi.