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Case
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Reference no. 9-208-069
Published by: Harvard Business Publishing
Originally published in: 2008
Version: 18 May 2009

Abstract

Delphi Corporation, operating under Chapter 11 bankruptcy protection, has filed a plan of reorganization with the court, under which a consortium of hedge funds led by Appaloosa Management will invest up to USD2.6 billion in new equity. Also participating in the plan is General Motors, which as the former parent of Delphi, has agreed to fund a portion of the massive pension and retiree health care liabilities that Delphi incurred when it separated from GM in a prior spin-off. The company has also had to seek significant financial concessions from the United Auto Workers, without which it may not survive as a going concern. Greatly complicating the negotiations is the significant uncertainty surrounding the value of Delphi's business and the complexity of its capital structure.
Industry:
Size:
25 billion, 171,000 employees
Other setting(s):
2007

About

Abstract

Delphi Corporation, operating under Chapter 11 bankruptcy protection, has filed a plan of reorganization with the court, under which a consortium of hedge funds led by Appaloosa Management will invest up to USD2.6 billion in new equity. Also participating in the plan is General Motors, which as the former parent of Delphi, has agreed to fund a portion of the massive pension and retiree health care liabilities that Delphi incurred when it separated from GM in a prior spin-off. The company has also had to seek significant financial concessions from the United Auto Workers, without which it may not survive as a going concern. Greatly complicating the negotiations is the significant uncertainty surrounding the value of Delphi's business and the complexity of its capital structure.

Settings

Industry:
Size:
25 billion, 171,000 employees
Other setting(s):
2007

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