DOW JONES NEWSWIRES
A group of retirees of Delphi Corp. (DPHIQ) filed suit Thursday,
saying it needs an independent administrator to help stop the
bankrupt auto supplier from terminating its pension plan for
salaried employees and transferring the obligation to the Pension
Benefit Guaranty Corp.
In a federal lawsuit filed in Michigan, the Delphi Salaried
Retiree Association asked the court to replace its current
trustees, who are Delphi executives, and appoint a new plan
administrator "loyal only to us."
The suit also seeks an immediate injunction prohibiting the
current plan administrator from negotiating a termination with the
PBGC until this suit is concluded.
"We have serious concerns about whether Delphi executives can
protect our pension rights while at the same time serving Delphi's
shareholders and creditors," the retiree group said.
The group said it was not notified before Delphi announced its
PBGC plan June 1.
Separately, the association filed an objection in the Delphi
bankruptcy case to a provision stating the pension plan, by
agreement, shall be terminated and transferred to the PBGC.
On Monday, General Motors Co. moved closer to buying its former
parts unit Delphi when a bankruptcy judge said GM could move
forward with a plan that will allow the auto maker to team up with
a private-equity firm to buy Delphi and take it out of
bankruptcy.
The deal, approved by Judge Robert Gerber of the U.S. Bankruptcy
Court in Manhattan, is designed to ensure GM a steady supply of
parts and allow Delphi to exit bankruptcy after nearly four years
in Chapter 11.
But another New York bankruptcy judge, who is overseeing
Delphi's bankruptcy case, also needs to sign off on the agreement.
That hearing is scheduled for next week.
Meanwhile, Delphi's lenders said Thursday that they will bid for
the auto-parts supplier this week and try to defeat the sale to GM
and the private-equity firm.
One condition of the GM agreement is Delphi will not be on the
hook for unfunded pensions for its hourly workers, an amount that
totals about $3.2 billion. GM, Delphi and the government's pension
watchdog are negotiating an agreement by which GM would assume some
or all of those pension costs, court document show.
Delphi, which was spun off from GM in 1999 and filed for
bankruptcy in 2005, has seen its value plunge amid falling auto
sales and has struggled for more than a year to pull together the
financing it needs to exit bankruptcy.
Delphi officials were not immediately available for comment.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
(David McLaughlin contributed to this report.)