Appaloosa May Face Old Delphi Claims Again

Oct 10 2008 | 1:50am ET

Hedge fund Appaloosa Management thought it dodged a bullet this summer when a federal judge dismissed part of an auto-parts maker’s lawsuit against it. It may have been wrong.

U.S. Bankruptcy Court Judge Robert Drain said Wednesday that he may have erred in dismissing the claim by Delphi Corp. that Appaloosa engaged in a secret campaign to avoid making good on a $2.55 billion equity investment deal it led. He asked the two sides to weigh in on whether the claims should be reinstated by Oct. 21.

“I’m afraid I was wrong on this point,” Drain said.

Delphi was relying on the Appaloosa-backed financing to exit bankruptcy protection. But Appaloosa and its partners pulled out of the deal, alleging that Delphi had violated its tenets by seeking additional financing from its former partner, General Motors Corp.

In addition to the allegations of the secret campaign, Delphi accuses Appaloosa chief David Tepper of misrepresenting his intentions to make good on the investment deal, and that the hedge fund tried to prevent the company from getting the debt financing it needed to escape bankruptcy.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...