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Last Updated: Wednesday, 5 October 2005, 21:54 GMT 22:54 UK
Delphi slumps on bankruptcy fears
Car gauge in a dashboard
Delphi has been looking at ways of restructuring its business
Shares in US car parts to electronics company Delphi have slumped 9% amid reports it is preparing to apply for Chapter 11 bankruptcy protection.

Also hurting shares was news that large institutional investors have filed a lawsuit alleging executives tried to hide the extent of the firm's problems.

The company announced in August that it was facing financial difficulties.

The New York Times said that Delphi, which planned to file for bankruptcy by 17 October, may do so this week.

'Broad and complex'

Delphi's shares, which already have taken a battering, slid 25 cents to $2.53.

Delphi, which was spun off from General Motors (GM) in 1999, has been posting losses and is struggling with high wage and benefit costs.

The lawsuit, filed in New York, alleges that the company concocted a "broad and complex scheme to lie about its financial results" after being separated from GM.

Current and former directors of Delphi are accused in the suit, as is an auditor.

The main plaintiffs include the Teachers' Retirement System of Oklahoma and the Public Employees' Retirement System of Mississippi.

Delphi spokesman Lindsey Williams declined to comment on Wednesday, saying the company does not speak about pending litigation.


SEE ALSO:
Delphi gives financial warning
05 Aug 05 |  Business
Delphi parting with finance boss
06 Mar 05 |  Business
Car part maker axes 11,500 jobs
29 Mar 01 |  Business


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