Banks Ask Judge To Toss Delphi Securities Fraud Suit

Law360 (January 30, 2006, 12:00 AM EST) -- A group of investment banks that underwrote bankrupt auto parts maker Delphi Corp.’s debt has asked a bankruptcy judge to halt a “distracting” securities-fraud complaint lodged against the company's top executives.

Leading underwriters Bank of America, Bear Stearns & Co., Citigroup Global Markets Inc. and Morgan Stanley & Co. claim the class action is "a needless drain on the debtors' estates."

They asked U.S. Bankruptcy Judge Robert Drain to suspend the lawsuit until Delphi completes its reorganization plan, or until he decides "that no plan of...
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