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  • January 2008 (Revised May 2009)
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Restructuring at Delphi Corporation (A)

By: Stuart C. Gilson and Sarah L. Abbott
  • Format:Print
  • | Pages:25
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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 $2.6 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.

Keywords

Restructuring; Capital Structure; Private Equity; Insolvency and Bankruptcy; Investment Funds; Labor and Management Relations; Auto Industry; Service Industry

Citation

Gilson, Stuart C., and Sarah L. Abbott. "Restructuring at Delphi Corporation (A)." Harvard Business School Case 208-069, January 2008. (Revised May 2009.)
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About The Author

Stuart C. Gilson

Finance
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