The bankruptcy judge handling Delphi Corp’s Chapter 11 case will reconsider the previously dismissed lawsuit Delphi filed against Appaloosa Management, according to a report from Reuters. The hedge fund several months ago backed out of a deal to finance Delphi’s emergence from bankruptcy.
Delphi initially filed suit against Appaloosa in May, hoping to win a court order to require the group to follow-through with its investment. In July, the court ruled that the case could proceed but certain elements were dismissed, including a fraud claim. Now, however, Judge Robert Drain, who is overseeing the case, said he believes the manner in which Appaloosa backed out of the deal – its secrecy and failure to disclose its plans – could constitute fraud, according to Reuters.
The claim will be reconsidered in a Nov. 6 hearing.
