Delphi May Ask Court to Force Appaloosa to Invest
Reuters reports that Delphi is considering asking federal bankruptcy judge Robert Drain to force equity investor Appaloosa Management to carry through with their $2.55b investment in the bankrupt auto parts manufacturer. Last Friday, Appaloosa announced they were backing out, citing GM's expanded role in the Delphi's exit strategy as the deal breaker. [NB: Appaloosa doesn't want GM to be able to prevent a strip-and-flip resolution to Delphi's bankruptcy.] In a filing with federal securities regulators, Delphi stated their board has formed a special litigation committee and engaged counsel to explore their legal options. Appaloosa had no comment, but they've said they'll consider investing in Delphi under "different terms." If Delphi doesn't get the funding from Appaloosa and/or other investors, they'll have to go back to GM for more than the $2.8b the automaker's already promised. If that fails, Judge Drain could lose his near-infinite patience, with Chapter 7 liquidation to follow.
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Wow, let me get this straight. Delphi (and presumably, GM) want to FORCE a company to invest in it when no binding contract was signed to do so, via the courts. In addition, if any one of us doesn't manage to pay our property tax, ownership of our homes is history. In the second instance, whose home, therefore, is it? In the first instance, whose money, therefore, is it? Excuse me, but I could have swore that the United States won the wars against fascism and communism. I'm obviously wrong.
Well first they have to get a ruling in their favor and it is a Federal court and not some Michigan state court so lets hold the outrage until after there is a ruling. Delphi can ask for whatever they want but getting it is another matter.
They are only asking for the court ruling so that it can be dropped behind closed doors when Appaloosa drops the $82.5M they want from Delphi for backing out of the deal.
Delphi's demand reminds me of a great old bumper sticker: "Support Mental Health or I'll Kill You"