Delphi to Proceed in Suit Against Hedge Fund

New York (HedgeCo.Net) – American auto parts maker Delphi has been given the green light to proceed with their suit against hedge fund Appaloosa Management.

U.S. Bankruptcy Judge Robert Drain denied a request by Appaloosa yesterday to dismiss the fraud and breach of contract lawsuit that Delphi had waged against them. Delphi is attempting to collect the $2.55 billion that was originally promised to them by Appaloosa as part of their plan to exit Chapter 11.

While Judge Drain did disregard some of Delphi’s complaints, sources say he rejected the arguments of Appaloosa, including the one that stated the agreement with Delphi only allows for damages of up to $250 million.

The money was part of a bigger, $6.1 billion refinancing strategy that was promised to Delphi through various investors. After $2 billion was granted by former parent company General Motors, Appaloosa got weary of the deal and cited an overdependence on GM. One day before the deadline to walk away, Appaloosa did just that, even though Delphi had attained the rest of the financing needed to solidify the deal.

The lawsuit is scheduled to go to trial next year.

Julie Scuderi
Senior Editor for HedgeCo.Net

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

About the HedgeCo News Team

The Hedge Fund News Team stays on top of breaking news in the Hedge Fund industry on an hourly basis. Signup to HedgeCo.Net to recieve Daily or Weekly news updates from our team.
This entry was posted in HedgeCo News and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

Comments are closed.