Government Drops Delphi Investigation
November 01, 2007

The U.S. Department of Justice reportedly is dropping its investigation into criminal wrongdoing by former executives at Delphi Corp. An official public announcement is expected in a matter of days, according to Detroit media.

For the past two years or so, the Justice Department was investigating whether criminal intent was behind accounting irregularities at automotive supplier Delphi, which is in bankruptcy. Former Delphi executives, including former Chairman and CEO J.T. Battenberg III, are accused of using fraudulent accounting to hide the company's deteriorating financial condition between 2000 and 2004.

Detroit newspapers, quoting unnamed sources, say government investigators could find no evidence that the executives personally profited from the accounting irregularities in the criminal case.

The accounting irregularities led to a civil case being filed by the federal Securities and Exchange Commission. That case is still pending. They also generated other lawsuits, some of which are pending and others of which have been settled. The bankruptcy court had set aside $10 million to defend the former executives in the criminal case. That money may now go to creditors and shareholders who have lost billions.

The lawsuits and investigations are but two of the numerous obstacles Delphi has encountered as it continues trying to emerge from Chapter 11 bankruptcy.

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