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Friday, April 04, 2008

Delphi Analysts Didn't Need an Oracle to See Trouble

Delphi's emergence from bankruptcy ran into a major road block today and given Delphi's troubled history mixed with the current mood in banking circles it did not take an Oracle to foresee this problem.

Delphi Corp.'s exit from bankruptcy was delayed after its proposed lead investor pulled out, saying the biggest auto-parts supplier to General Motors Corp. failed to meet conditions of their $2.55 billion agreement.

Appaloosa Management LP cited what it said were violations of the accord, including failure to show that Delphi could get $6.1 billion in exit loans. Delphi said in a statement that it has the financing, was ready to close on its plan today and is ``prepared to pursue actions,'' without elaborating.

Delphi was mired in accounting scandals as it headed into bankruptcy and coming out of bankruptcy with something worth saving in a banking climate where no one trusts anyone and where credit is almost an urban legend, it is not surprising that a creditor of Delphi would opt to sneak out in the morning after before Delphi wakes up without even disturbing the bedding.