From MEMA Industry News

Highland Capital Management LP has begun direct talks with Delphi Corp. and its former parent General Motors Corp. that could make the Dallas-based hedge fund the lead investor in a new financing package to help Delphi emerge from Chapter 11.

Highland had been working with Delphi through co-investor Pardus Capital Management, which acted as an intermediary on a bailout plan. But in a filing with the U.S. Securities and Exchange Commission this week, Highland says it has signed a new confidentiality agreement to deal directly with Delphi .

Meanwhile, Dow Jones Newswires says Pardus is joining the rival investor consortium led by Appaloosa Management. That group’s $3.4 billion financing package beat Highland ’s original $4.7 billion offer in January. But Appaloosa group has been seeking new partners because co-lead investor Cerberus Capital Management is expected to drop out, taking its $1.7 billion investment with it.