[Draft: (New York) March 16, 2006]
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
DELPHI CORPORATION
------------------
(Name of Issuer)
Common Stock, $0.01 Par Value Per Share
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(Title of Class of Securities)
247126105
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(CUSIP Number)
with copies to:
Mark L. Mandel, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
(212) 819-8546
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
March 15, 2006
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[X].
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SCHEDULE 13D
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CUSIP No. 247126105
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----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Investment Limited Partnership I
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
----- --------------------------------------------------------------------------
3 SEC USE ONLY
----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
----- --------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
---------------------- ----- ---------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ----- ---------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
27,716,000
----- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
27,716,000
----- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
27,716,000
----- --------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.93%
----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
----- --------------------------------------------------------------------------
2
SCHEDULE 13D
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CUSIP No. 247126105
-------------------
----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Palomino Fund Ltd.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
----- --------------------------------------------------------------------------
3 SEC USE ONLY
----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
----- --------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
---------------------- ----- ---------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY 0
EACH REPORTING ----- ---------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
24,284,000
----- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
24,284,000
----- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,284,000
----- --------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.32%
----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----- --------------------------------------------------------------------------
3
SCHEDULE 13D
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CUSIP No. 247126105
-------------------
----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Management L.P.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
----- --------------------------------------------------------------------------
3 SEC USE ONLY
----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
----- --------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
---------------------- ----- ---------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ----- ---------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
52,000,000
----- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
52,000,000
----- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
52,000,000
----- --------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25%
----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
----- --------------------------------------------------------------------------
4
SCHEDULE 13D
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CUSIP No. 247126105
-------------------
----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Partners Inc.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
----- --------------------------------------------------------------------------
3 SEC USE ONLY
----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
----- --------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
---------------------- ----- ---------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ----- ---------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
52,000,000
----- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
52,000,000
----- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
52,000,000
----- --------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25%
----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----- --------------------------------------------------------------------------
5
SCHEDULE 13D
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CUSIP No. 247126105
-------------------
----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
David A. Tepper
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
----- --------------------------------------------------------------------------
3 SEC USE ONLY
----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
----- --------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
---------------------- ----- ---------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING ----- ---------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
52,000,000
----- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
----- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
52,000,000
----- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
52,000,000
----- --------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25%
----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
----- --------------------------------------------------------------------------
6
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Statement"), relates to the common
stock, $0.01 par value per share (the "Common Stock"), of Delphi Corporation, a
Delaware corporation (the "Issuer"). According to the Issuer's most recent
Form 10-Q filed with the U.S. Securities and Exchange Commission on November 9,
2005, the principal executive offices of the Issuer are located at 5725 Delphi
Drive, Troy, Michigan 48098.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Statement is being filed by and on behalf of: (i) Appaloosa
Investment Limited Partnership I ("AILP"); (ii) Appaloosa Management L.P.
("AMLP"); (iii) Palomino Fund Ltd. ("Palomino"); (iv) Appaloosa Partners Inc.
("API"); and (v) David A. Tepper ("Mr. Tepper"). AILP, AMLP, Palomino, API and
Mr. Tepper are hereinafter sometimes collectively referred to as the "Reporting
Persons."
(b) The business address of AMLP is Appaloosa Management L.P., 26 Main
Street, Chatham, NJ 07928. The business address of each of AILP, Palomino, API
and Mr. Tepper is c/o Appaloosa Management L.P., 26 Main Street, Chatham, NJ
07928.
(c) AILP is a Delaware limited partnership that is an investment fund. AMLP
is a Delaware limited partnership that is the general partner of AILP and acts
as investment advisor to Palomino. Palomino is a British Virgin Islands
corporation that is an investment fund. API is a Delaware corporation that is
the general partner of AMLP. Mr. Tepper is a citizen of the United States and is
the sole stockholder and the President of API. Mr. Tepper owns the majority of
the limited partnership interests in AMLP.
The attached Schedule A lists the executive officers and directors of each
of AILP, AMLP, API and Palomino and contains the following information with
respect to each such person: (i) name; (ii) business address; (iii) present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is conducted;
and (iv) citizenship.
(d) During the past five years, none of the Reporting Persons nor, to the
best of any Reporting Persons' knowledge, any person named in Schedule A to this
Statement, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the past five years, none of the Reporting Persons nor, to the
best of any Reporting Persons' knowledge, any person named in Schedule A to this
Statement, was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activity subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) AILP is a Delaware limited partnership. AMLP is a Delaware limited
partnership. Palomino is a British Virgin Islands Corporation. API is a Delaware
corporation. Mr. Tepper is a citizen of the United States.
7
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
AMLP, API and Mr. Tepper beneficially own 52,000,000 shares of Common Stock
(the "AMLP Shares"). AILP beneficially owns 27,716,000 shares of Common Stock
(the "AILP Shares"), which were acquired with the funds of AILP. Palomino
beneficially owns 24,284,000 shares of Common Stock (the "Palomino Shares," and
together with the AMLP Shares and the AILP Shares, the "Shares"), which were
acquired with the funds of Palomino. The aggregate purchase price of the AILP
Shares was $9,295,306.80. The aggregate purchase price of the Palomino Shares
was $8,144,293.20.
ITEM 4. PURPOSE OF TRANSACTION
The acquisition of the Shares by the Reporting Persons was for investment
purposes. On March 15, 2006, in its capacity as a stockholder, AMLP sent a
letter to the Issuer's board of directors expressing concerns over the current
management of the Issuer in connection with the commencement and prosecution of
the Issuer's case under chapter 11 of the Bankruptcy Code (the "March 15th
Letter"). Particularly, the March 15th Letter outlines AMLP's belief that the
Issuer's management and board of directors have engaged in, and are continuing
to pursue, courses of action that are in breach of their fiduciary duties of
care, loyalty and candor, and that have resulted in, and are continuing to
inflict, material harm to the Issuer and all of its bona fide stakeholders.
Notably, there has been no indication that any material adverse event occurred
between August 2, 2005 (when a dividend was paid) and October 8, 2005 (when the
chapter 11 petitions were filed) that would justify the onset of bankruptcy. In
addition to having improperly determined to seek chapter 11 relief, the Issuer's
management and board of directors have repeatedly authorized the Issuer to take
actions and make public statements in the chapter 11 case that are inconsistent
with their duty to maximize value and prevented the Issuer's stockholders from
being properly represented. For example:
o the Issuer has repeatedly, materially overstated the amount of its
labor-related obligations by failing to take into account the fact
that many of the benefits are unvested (i.e., they can be terminated
without incurring liability) and any legal duty to provide them
expires with the applicable underlying collective bargaining agreement
in late 2007;
o the Issuer has improperly characterized itself as "grossly insolvent"
in reliance on a superficial balance sheet analysis, and without
performing an appropriate enterprise valuation based on a
properly-vetted business plan presented after the formulation and
assessment of alternative reorganization strategies;
8
o the Issuer has included in the Key Employee Compensation Program
("KECP") a reservation of 10% of the Issuer's stock for management,
putting management in direct conflict with the Issuer's stockholders
(the KECP gives management the incentive to convert debt into equity
of the reorganized Issuer, diluting current stockholders' ownership
stake);
o the Issuer has cancelled its annual stockholders meeting for 2005 in
violation of the express requirements of applicable Delaware law,
thereby preventing stockholders from exercising their governance
rights; and
o the Issuer has thwarted the stockholders' efforts to obtain a vehicle
to be heard in the chapter 11 case by opposing the appointment of an
official equityholders committee.
Moreover, the March 15th Letter demands that that the board schedule and
hold the 2005 annual stockholders' meeting at the earliest possible time and
further informs the Issuer's board of directors of AMLP's intention to nominate
and elect a slate of between one and four directors to the board of directors at
such meeting. The March 15th Letter further informs the Issuer's board of
directors that if the Issuer is unwilling to proceed on a voluntary basis, AMLP
is prepared to seek appropriate relief to compel a stockholders' meeting and
asks that the Issuer promptly commence an action for damages arising from the
breaches of the fiduciary duties of care and loyalty described in the March 15th
Letter. AMLP has indicated that if the Issuer fails to do so, AMLP is prepared
to seek relief from the Bankruptcy Court to take this action on the Issuer's
behalf. The foregoing summary of the March 15th Letter is qualified in its
entirety by reference to the March 15th Letter, a copy of which is filed as
Exhibit 1 to this Statement.
Except as described in this Item 4 or otherwise described in this
Statement, the Reporting Persons currently have no plans or proposals which
relate to or would result in any transaction, event or action enumerated in
paragraphs (a) through (j) of Item 4 of the form of Schedule 13D promulgated
under the Securities Exchange Act of 1934, as amended.
Each of the Reporting Persons reserves the right, in light of its or his
ongoing evaluation of the Company's financial condition, business, operations
and prospects, the market price of the Common Stock, conditions in the
securities markets generally, general economic and industry conditions, its or
his business objectives and other relevant factors, to change its or his plans
and intentions at any time, as it or he deems appropriate. In particular, and
without limiting the generality of the foregoing, any one or more of the
Reporting Persons (and their respective affiliates) reserves the right, in each
case subject to any applicable limitations imposed on the sale of any of their
Common Stock by the Securities Act of 1933, as amended, or other applicable law,
to (i) purchase additional shares of Common Stock or other securities of the
Company, (ii) sell or transfer shares of Common Stock or other securities
beneficially owned by them from time to time in public or private transactions,
and (iii) cause any of the Reporting Persons to distribute in kind to their
respective stockholders, partners or members, as the case may be, shares of
Common Stock or other securities owned by such Reporting Persons.
9
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) Set forth in the table below is the number and percentage of shares
of Common Stock beneficially owned by each Reporting Person as of March 15,
2006.
NUMBER OF SHARES NUMBER OF SHARES AGGREGATE
BENEFICIALLY BENEFICIALLY OWNED NUMBER OF PERCENTAGE OF
OWNED WITH SOLE WITH SHARED VOTING SHARES CLASS
VOTING AND AND DISPOSITIVE BENEFICIALLY BENEFICIALLY
NAME DISPOSITIVE POWER POWER OWNED OWNED(1)
------------------------------------ ----------------- ------------------ ------------ -------------
Reporting Persons 0 52,000,000 52,000,000 9.25
Appaloosa Investment
Limited Partnership I 0 27,716,000 27,716,000 4.93
Palomino Fund Ltd. 0 24,284,000 24,284,000 4.32
Appaloosa Management L.P. 0 52,000,000 52,000,000 9.25
Appaloosa Partners Inc. 0 52,000,000 52,000,000 9.25
David A. Tepper 0 52,000,000 52,000,000 9.25
(1) The percentages of Common Stock indicated in this table are based on
the 561,781,590 shares of Common Stock outstanding as of September 30,
2005, as disclosed in the Issuer's most recent Form 10-Q filed with
the Securities and Exchange Commission on November 9, 2005. Any Common
Stock not outstanding which is subject to options or conversion
privileges which the beneficial owner had the right to exercise on or
within 60 days after the date hereof is deemed outstanding for
purposes of computing the percentage of Common Stock owned by such
beneficial owner and for the Reporting Persons but is not deemed
outstanding for the purpose of computing the percentage of outstanding
Common Stock owned by any other beneficial owner.
Other than as described above, no Reporting Person, and to the best
knowledge of the Reporting Persons, none of the persons set forth on Schedule A,
beneficially owns any securities of the Issuer.
(c) None of the Reporting Persons has purchased or sold common stock during
the past sixty (60) days.
10
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, AGREEMENTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
The information set forth, or incorporated by reference, in Item 3 is
hereby incorporated by this reference in this Item 6.
Other than as described in this Statement, to the best knowledge of the
Reporting Persons there are no contracts, arrangements, understandings or
relationships among the Reporting Persons or the persons set forth on
Schedule A, and between any such persons and any other person, with respect to
any securities of the Issuer, including but not limited to, transfer and voting
of any of the securities of the Issuer, joint ventures, loan or option
arrangements, put or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies or a pledge or contingency the
occurrence of which would give another person voting power or investment power
over the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Schedule 13D is supplemented as follows:
Exhibit No. Description
----------- --------------------------------------------------------------
1 Letter sent by Appaloosa Management L.P. to the Members of the
Board of Directors of Delphi Corporation, dated March 15, 2006
2 Joint Filing Agreement
11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 16, 2006
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By: APPALOOSA MANAGEMENT L.P.,
Its General Partner
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------------
Name: David A. Tepper
Title: President
PALOMINO FUND LTD.
By: APPALOOSA MANAGEMENT L.P.,
Its Investment Adviser
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------------
Name: David A. Tepper
Title: President
APPALOOSA MANAGEMENT L.P.
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------------
Name: David A. Tepper
Title: President
APPALOOSA PARTNERS INC.
By: /s/ David A. Tepper
--------------------------------
Name: David A. Tepper
Title: President
12
/s/ David A. Tepper
----------------------
David A. Tepper
13
SCHEDULE A
Executive Officers and Directors of Appaloosa Investment Limited Partnership I,
Palomino Fund Ltd., Appaloosa Management L.P. and Appaloosa Partners Inc.
PRESENT PRINCIPAL OCCUPATION OR
NAME CITIZENSHIP EMPLOYMENT BUSINESS ADDRESS
-------------------- ---------------- ------------------------------------ --------------------------------
David A. Tepper United States President, Appaloosa Partners c/o Appaloosa Management L.P.,
Inc.; Director, Palomino Fund, Ltd. 26 Main Street, Chatham,
NJ 07928
Ronald Goldstein(1) United States Vice President and Secretary, c/o Appaloosa Management L.P.,
Appaloosa Partners Inc. 26 Main Street, Chatham,
NJ 07928
Lawrence O'Friel(1) United States Treasurer, Appaloosa Partners Inc. c/o Appaloosa Management L.P.,
26 Main Street, Chatham,
NJ 07928
Ernest Morrison(1) United Kingdom Partner of the law firm Cox Milner House, 18 Parliament
Hallett Wilkinson; Director, Street, Hamilton, Bermuda
Palomino Fund, Ltd.
Graham Cook(1) United Kingdom Managing Director of TMF (BVI) Mill Mall P.O. Box 964,
Limited; Managing Director of Road Town, Tortola, British
Bison Financial Services Limited; Virgin Islands
Director, Palomino Fund, Ltd.
(1) Such persons disclaim beneficial ownership of any of the securities
covered by this Statement.
14