Delphi Investor Group Backs Out

Appaloosa Management plans to call off the proposal to invest roughly $2.5 billion in the bankrupt auto-parts supplier.
By TSC Staff ,

A group led by Appaloosa Management plans to call off the proposal to invest roughly $2.5 billion in bankrupt auto-parts supplier

Delphi

(DPHIQ)

, saying the company hasn't met its part of the arrangement.

The investor group also wants to be paid a fee of $82.5 million because the deal couldn't be closed as expected. However, Appaloosa said it would be willing to consider an alternative transaction with Delphi "and will continue to actively engage in such discussions."

As a result, Delphi's plan to end its time in bankruptcy will likely be postponed. The former

GM

(GM) - Get Report

division filed for Chapter 11 in the fall of 2005. Details of the Appaloosa decision were filed with the

Securities and Exchange Commission

Friday.

Shares of Delphi last closed at 12 cents, and lately they were down 3 cents. GM was losing 72 cents, or 3.3%, to $20.87.

This article was written by a staff member of TheStreet.com.

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