Platinum Equity, which announced this month a $3.6 billion acquisition of bankrupt Delphi Corp., may not end up with the auto parts supplier after all.

A federal bankruptcy judge ruled Wednesday that Delphi, which is set to be acquired by the Beverly Hills private equity firm, must open the process up to outside bidders. A Delphi spokesman said the company currently plans to proceed with the sale, scheduled for approval by July 23, but will allow for additional bids.

Judge Robert Drain said that the government-brokered sale to the firm led by Los Angeles billionaire Tom Gores violated lenders' rights. Delphi lenders stand to lose $2 billion in debtor-in-possession financing if the Platinum sale goes through.

Under the original plan - announced June 1, the same day General Motors Corp. filed for bankruptcy - Platinum would have provided $500 million in equity and financing, with an additional $2.5 billion coming from GM, according to the Wall Street Journal. The auto giant, the former parent of Delphi, would have acquired four Delphi plants and its steering business, while most of the remaining assets would have gone to Platinum.

Delphi lenders argued that the plan was rushed through by the government in order to facilitate GM's bankruptcy, and that Platinum was not best suited to acquire the auto parts company.

Platinum, which specializes in reviving distressed companies, said that it in fact has been considering purchasing Delphi for the past three years, learning the company's business and developing relationships with management.

"Platinum Equity is uniquely equipped to help Delphi in ways no other investor can," said Gores in a statement. "Struggling companies need partners with strong operational capabilities, a deep understanding of their business and a track record of creating real value."

Gores did not indicate whether his company would participate in the bidding or appeal the judge's ruling.

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