An investment group says it has terminated its agreement to invest $2.55 billion in auto parts supplier Delphi Corp., which has been trying to emerge from bankruptcy protection.

The hedge fund Appaloosa Management LP made the announcement on Friday as Delphi faced a deadline to raise $6.1 billion in loans to help it out of bankruptcy.

Friday was the first day that Appaloosa could pull out of the deal if Delphi had not raised the money.

The hedge fund said Delphi has breached an agreement it had with the investor group.