Bankruptcy judge approves changes in Delphi plan

A reorganized Delphi would give investors equity stakes.

NEW YORK (AP) — A judge in the Delphi bankruptcy case approved changes Friday to a plan by investors to inject as much as $2.55 billion into the auto parts maker, moving it closer to an exit from court protection.

Hedge fund Appaloosa Management LP and five other investors would get equity stakes in a reorganized Delphi Corp. They are the lead investors in a plan that is key to the company’s ability to emerge from bankruptcy.

The group has twice received the court’s approval for different versions of its proposal, and this latest approval was designed to clear the way to a vote on the company’s Chapter 11 plan.

Appaloosa founder David Tepper said Thursday, “We made a deal. We’re just trying to get it done. We’d like to see this thing come out of bankruptcy, if we can.”

The Troy, Mich.-based company had faced opposition to the equity plan from creditors, shareholders and the International Union of Electrical Workers, a labor union representing the second largest group of Delphi workers. They had opposed a Nov. 14 proposal that was made to be more favorable to the equity investors led by Appaloosa, at the expense of creditors and current shareholders. But earlier this week, Delphi reached an agreement that cleared the way to the judge’s approval.

That agreement, announced Monday, decreased slightly the discount investors will get on new shares, but increased a dividend they will get on preferred shares.

The investor group led by Appaloosa also includes Harbinger Capital Partners Master Fund I Ltd.; Merrill Lynch, Pierce, Fenner & Smith Inc.; UBS Securities LLC; Pardus Capital Management LP, and Goldman Sachs Group Inc.