NEW YORK (AP) - A bankruptcy court judge said Friday that auto parts supplier Delphi can remove fraud claims while pushing ahead with others in its lawsuit against the hedge fund Appaloosa Management LP.
U.S. Bankruptcy Judge Robert Drain ruled in favor of Troy, Mich.-based Delphi Corp., which once was a subsidiary of General Motors Corp. and remains a big supplier to GM.
Appaloosa is expected to seek dismissal of all or part of the case in an effort to avoid trial.
In court, Drain agreed with Delphi that the hedge fund’s objection to altering the lawsuit amounted to no more than “a press release.” He said it was either “largely irrelevant or entirely irrelevant” to the case.
An earlier schedule had the trial set to start in mid-June, but a lawyer for Appaloosa told the judge that it might need more time to prepare.
Appaloosa, run by Goldman Sachs alum David Tepper, had led a group of investors in 2007 that agreed to inject as much as $2.55 billion into Delphi in exchange for stock. Investors withdrew from the deal in April 2008 and Delphi sued.
Delphi says the Appaloosa group urged lenders to withdraw commitments for $6.1 billion in financing it needed to exit bankruptcy. Delphi argues that Appaloosa and Tepper were liable for what other members of the group may have done to discourage lenders.
The auto supplier has been operating under court protection since October 2005.
Please read our comment policy before commenting.