On Sept. 12, GM upped its contributions to help Delphi from $6 billion to $10.6 billion, including assuming $3.4 billion of Delphi's underfunded hourly pension plan. Delphi had faced pressure from the Pension Benefit Guaranty Corp. to shift some of its pension obligations before Sept. 30. In exchange, Delphi agreed to grant GM a $2.1 billion administrative claim to be paid with preferred stock; Delphi also agreed to waive any claims it could make in connection with its 1999 spinoff. Delphi's creditors bitterly complained that the new agreement with GM amounted to a 'wholesale surrender' that gave too much to GM. The creditors lead attorney, Robert Rosenberg, told the court earlier this week 'the simple fact is (Delphi has) once again knuckled under GM's demands' and that GM was attempting 'a heavy-handed exercise of brute power.' GM spokeswoman Renee Rashid-Rerem said the parties had reached 'a tentative agreement,' but she declined to discuss the details until it is finalized. The hearing in U.S. Bankruptcy Court in New York was delayed this morning by Drain while both sides hammered out the details. Under the proposed terms of today's settlement, GM would convert preferred stock to common stock and grant it to creditors to provide them a 20 percent return if they don't get at least 20 cents on the dollar for their claims, Delphi's lead attorney Jack Butler said, according to Bloomberg News. If Delphi doesn't complete a reorganization, GM would split the first $600 million it is paid on the administrative claim with the creditors. GM's $2.5 billion unsecured claim is unaffected, Butler said. The proposed deal allows Delphi to buy back as much as half of GM's preferred stock within six months of emerging, at a 15 percent discount, Butler said. United Auto Workers President Ron Gettelfinger said the union hopes Delphi can finally make a deal. 'Obviously, at this point in time, we would like to see them come out of bankruptcy,' Gettelfinger said Wednesday after an appearance on Capitol Hill. Delphi nearly emerged in April from bankruptcy but a group of investors led by Appaloosa Management LP withdrew from an agreement to invest up to $2.55 billion in a recapitalized Delphi. Delphi sued Appaloosa in May seeking to force the investment group to follow through. You can reach David Shepardson at (202) 662 - 8735 or dshepardsondteom.