Guardian Unlimited – Billionaire hedge fund manager John Paulson has made a £100m profit by betting that the Royal Bank of Scotland’s share price would fall dramatically, according to calculations by the Guardian, adding fuel to the debate about the impact of short-selling on bank stocks.

New York-based Paulson, who made more than $3bn by betting against the US housing market, now appears to be profiting from positions placed on the assumption that bank shares would tumble in the aftermath of the market chaos caused by the demise of the sub-prime mortgage industry.

His hedge fund, Paulson & Co, was one of the few to trade through the ban imposed on short-selling by the Financial Services Authority in September to protect the rescue takeover of HBOS by Lloyds TSB.

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Tags: aftermath, amp, assumption, bank-stocks, billionaire, demise, financial-services-authority, guardian, hbos, hedge-fund-manager, john paulson, lloyds, market chaos, mortgage industry, royal-bank-of-scotland, share price, sub-prime-mortgage, takeover, us housing market

New York (HedgeCo.Net) – While Delphi continues its quest to secure the capital needed to exit bankruptcy, GM has announced they will increase their loan to the auto parts maker to $950 million.  The extra $300 million will help Delphi maintain some liquidity throughout the process.

Delphi, who sought bankruptcy protection in October 2005, pulled together an exit strategy that included a $6.1 billion influx of capital.  Hedge fund Appaloosa Management took the reins and agreed to provide $2.55 billion to help lift them out of Chapter 11. 

Former parent company GM also came to the rescue and promised a whooping $2 billion piece of the puzzle.  However, Appaloosa proceeded to walk away from the deal during the final days in April, leaving Delphi with no other alternatives.

Delphi took action against the hedge fund in hopes of making it deliver on the promised capital.  The hedge fund bailed amidst what they thought was an increasingly risky situation.  They also were concerned whether or not Delphi has an overreliance on GM.  

Delphi’s next hearing is scheduled for August 26^th in the U.S. Bankruptcy Court in New York.  GM just reported a $15.5 billion quarterly loss, one of the largest in their history.    

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: auto-parts-supplier, bankruptcy-code, bankrupty, bastion, brokerages, chief-executive, delphi-corp, disapproval, due-diligence-service, harbinger, joseph-gregory, mutual-fund, sub-prime-mortgage, zukin

New York (HedgeCo.Net) – Appaloosa Management is getting hit from all angles in their attempt to walk away from the deal they struck with Delphi. The hedge fund is not only being sued by the auto parts maker, but now creditors of Delphi Corp. are seeking to intervene on the case.

The lawsuit stems from an original agreement, led by Appaloosa, to provide Delphi with $2.55 billion in aid to help them exit Chapter 11. Though $6.1 billion was needed to make that happen, it looked as if Delphi was going to pull it together, thanks largely to a $2 billion influx of cash from former parent company, General Motors.

Appaloosa walked away from the deal at the deadline, claiming that Delphi had violated several agreements and had an over reliance on GM.
Now, creditors are siding with Delphi, saying that Appaloosa walked away simply because they lost interest in the deal.

“Because of the failure to provide the agreed-upon investment financing, distributions that should have been made to creditors pursuant to the plan have not been made,” the Creditors Committee said in the court papers.

The committee said it "should have the right" to join in the lawsuit because they would have "directly benefitted" from Appaloosa’s investment.

Delphi is seeking a ruling that would force Appaloosa to deliver on their original promise.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com

Tags: 100-million, april-29, bankrupty, bastion, brokerages, disapproval, due-diligence-service, extra-cash, harbinger, last-november, nasdaq, setback, sub-prime-mortgage, viability