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Ruling allows Delphi retirees’ suit to proceed

Published: Wed, September 29, 2010 @ 12:06 a.m.




A federal judge has rejected motions to dismiss the Delphi Corp.’s salaried-retirees lawsuit against the Pension Benefit Guaranty Corp., a ruling that virtually assures that their case will be tried in federal court.

The PBGC’s attempts to dissolve the Delphi salaried retirees’ case were thwarted in a preliminary hearing last week, when Judge Arthur Turnow in a Michigan U.S. District Court denied the PBGC’s motions for dismissal and summary judgment.

The judge also ruled against the PBGC’s motion to seal court proceedings, with the exception of 50 pages of PBGC documents.

“The end result of this is that it officially sets the stage for us to go to trial,” said Dennis Black, chairman of the Delphi Salaried Retirees Association. “The judge decided that our case had enough validity to make it reasonable.”

The ruling is a major victory in the salaried retirees’ ongoing struggle against the federal pension insurer, which took over their pension plans during the federal government’s restructuring of General Motors last year. The termination of the salaried pension plans led to between 30 percent and 70 percent benefit reductions.

The PBGC has agreed to pay back the benefits lost in the event that the lawsuit is decided in favor of the retirees. The agency declined to comment on the hearing.

The case now will move to the discovery phase of the trial, said Chuck Cunningham, legal liaison for the Delphi Salaried Retirees Association. A date has not been set to schedule discovery proceedings, he said, but added he expects the case to move forward soon.

As the case moves to trial, the retirees likely are going to subpoena documents from the Treasury Department and GM regarding the federal Auto Task Force’s bailout of the company, said Bruce Gump, chairman of the Warren Legislative Group of the Delphi Salaried Retirees Association.

The retirees argue these documents will show that the PBGC’s decision to terminate the salaried pension plans was improper and made under political pressure to expedite GM’s exit from bankruptcy.

“The big deal with the hearing ruling is that we can move forward,” Gump said. “We have every reason to believe we will prevail.”

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