By BREE FOWLER
Associated Press

NEW YORK - A bankruptcy judge said Wednesday that a formal sale process needs to be put in place in order to ensure that the potential sale of Delphi's assets results in the greatest possible return for stakeholders.

Hon. Robert Drain said potential bids from the Troy, Mich.-based Delphi Corp.'s lenders and other parties need to be considered before the deal between the company and an affiliate of the private-equity firm Platinum Equity can be allowed to go through.

"I don't understand what's so special about Platinum," Drain said. "They probably have a lot of money and they have good lawyers. But there are other people who have a lot of money and good lawyers too."

Lawyers for many of the company's lenders packed a New York courtroom for what at times was a heated hearing.

Under a deal announced this month, Delphi plans to sell some assets to Parnassus Holdings II LLC, an affiliate of Platinum Equity, which will operate Delphi's businesses in the U.S. and abroad.

If successful, the deal could lift Delphi out of bankruptcy protection after nearly four years of court oversight as early as this summer.

General Motors Corp., Delphi's former parent and still its largest customer, will provide $2 billion to help finance the deal. It also will acquire some of Delphi's North American plants. Other "non-core" plants and assets will be sold off over time.

GM also will provide a $250 million credit facility to keep the company going until its expected exit from bankruptcy protection late this summer, along with a $500 million loan facility following the sale.

If Delphi can't convince creditors to support the deal before a July 23 hearing, it would resort to a 363 sale, which refers to the section of the bankruptcy code that outlines the process for a court-directed auction of assets.

Drain gave preliminary approval for the use of the $250 million credit facility.