Delphi’s Bankruptcy-Exit Plan May Cost GM More

General Motors Corp. may have to pay more to help parts supplier Delphi Corp. exit from bankruptcy after a private equity deal to inject $2.5 billion into Delphi fell through, the Associated Press reported Friday.

The Appaloosa Management-led investment was a key component in Delphi’s reorganization, which has been complicated by a tight credit market, AP said.

The deal’s fall-through puts Delphi’s plan to exit bankruptcy at risk and raises the possibility that GM may be forced to offer more support to the bankruptcy-exit plan, AP reported. GM is Delphi’s former parent company.

A Standard & Poor’s analyst told investors that the sooner Delphi emerges from bankruptcy, the better off GM will be, AP reported.

A federal bankruptcy judge approved Delphi’s reorganization plan in January, clearing the way for it to emerge from Chapter 11 bankruptcy protection.