Pierce, Fenner & Smith Inc.; UBS Securities LLC; Goldman Sachs & Co.; and Pardus Capital Management L.P.

Pierce, Fenner & Smith Inc.; UBS Securities LLC; Goldman Sachs & Co.; and Pardus Capital Management L.P.

Under the terms of the agreement, Appaloosa and its partners will buy $800 million in convertible preferred shares and about $175 million of common stock in Delphi. The investment group also agreed to buy any leftover shares after a $1.6 billion rights offering to existing common stockholders.

Delphi struck the deal after it scrapped an earlier agreement, worth up to $3.4 billion, involving Appaloosa and other investors. That plan fell apart when one of the key investors, Cerberus Capital Management LP, decided to pull out shortly before it agreed to buy an 80 percent stake in Chrysler Group from DaimlerChrysler AG.

U.S. Bankruptcy Judge Robert Drain approved the new deal quickly and with little comment Thursday. He called the investment agreement "an extremely important step."

In opting for the Appaloosa offer, Delphi turned down an unsolicited proposal from Highland Capital Management LP. It said in court that the only objection it received to its plan came from Highland.

The approval comes on the heels of the deal between Delphi and the United Auto Workers, which represents about 16,000 Delphi employees. That agreement, which followed two years of contentious talks, keeps some plants once in jeopardy from closing in exchange for the concessions.

Miller said Delphi has now reached agreements with four of its six unions and is in discussions with the remaining two, which he did not name. He said the company remains committed to achieving a "consensual resolution."

Delphi's second-largest union, the International Union of Electronic Workers-Communications Workers of America, last month said it planned to terminate its contracts with the company and said a strike was a "real possibility."

A spokeswoman for the union, which represents about 2,000 hourly workers, said the IUE-CWA was not among the four that had reached a deal with the company.

While GM remains Delphi's largest customer, more than half of Delphi's revenue now comes from other sources.

As part of its reorganization plan, Delphi expects to provide $2.70 billion in cash to GM. The auto maker has agreed to subsidize the wages of, and pay other costs for, some longtime Delphi employees, and will operate or find a third-party to run several of the parts company's factories.