Looks like Harman International won't be making the transition from public to private company after all. The buyout is on the rocks.

Under the previously announced deal, Kohlberg Kravis Roberts and Goldman Sachs would have bought Harman for $8 billion. But when the electronics giant posted disappointing earnings reports, the two investment companies backed out, and even tried to duck the $225 million breakup fee called for in the buyout agreement. The dispute seemed destined to end up in court.

Instead, KKR and Goldman will buy a big bundle of Harman bonds and the buyout is officially off. "We view this $400 million investment as a vote of confidence in our business and its prospects for continued growth," said Harman chair and audio pioneer Dr. Sidney Harman.