The U.S. autos task force overseeing the restructuring of General Motors Corp on Wednesday asked a federal bankruptcy judge to block the automaker from providing an additional $150 million in funding to bankrupt parts supplier Delphi Corp.
The task force asked U.S. Bankruptcy Judge Robert Drain of the Southern District of New York to give the federal government until April 30 to assess GM's relationship with its troubled former parts unit.
Earlier this week the task force, which is headed by former investment banker Steve Rattner, gave GM 60 days until June 1 to come up with a more sweeping plan to cut costs and slash debt under the threat of bankruptcy.
Delphi, which GM spun off in 1999, has been operating under Chapter 11 bankruptcy protection since 2005.
In March, GM said it had agreed to advance Delphi $450 million, up from $300 million, contingent on completing its purchase of Delphi's steering unit.
Just over a week ago, Drain delayed a decision on whether to approve the sale of the steering unit to GM after the Treasury Department objected. Treasury has the authority to block transactions of over $100 million by GM under the terms of the government's emergency loans.
GM has been kept afloat since the start of the year with $13.4 billion in emergency loans from the Treasury.
In its filing on Wednesday, the autos task force said it had informed GM on March 23 that it objected to the $150 million increase in funding for Delphi.
The task force, represented by the law firm Cadwalader, Wickersham & Taft, asked Drain to give it until April 30 to conclude its "due diligence of the GM-Delphi relationship."
"Treasury's right to prohibit GM for funding Delphi $150 million is unequivocal," the task force said in its filing.
A hearing before Drain is set for Thursday.
