Delphi Corp. Securities, Derivative and ERISA Litigation
The Delphi ERISA Consolidated Complaint was filed in the United States District Court for the Eastern District of Michigan on behalf of Plaintiffs and a class (the “Class”) of all persons who were participants in or beneficiaries of the following Delphi-sponsored, defined-contribution plans (collectively “the Plans”): (1) the Delphi Savings-Stock Purchase Program for Salaried Employees in the United States; (2) the Delphi Personal Savings Plan for Hourly-Rate Employees in the United States; (3) the ASEC Manufacturing Savings Plan; and (4) the Delphi Mechatronic Systems Savings-Stock Purchase Program from May 28, 1999 to November 1, 2005 (the “Class Period”) and whose accounts included investments in Delphi or General Motors (“GM”) common stock.
Plaintiffs allege that during the Class Period, the Defendants breached their fiduciary duties to Plaintiffs and the Class members by:
• failing to prudently and loyally manage the Plans’ assets
• failing to act in accordance with Plan documents and ERISA
• failing to monitor fiduciaries
• failing to disclose to and inform the other fiduciaries of the Plans of information which the other fiduciaries reasonably needed to know to fulfill their fiduciary duties to Plan participants and beneficiaries
• and breaching their obligations as co-fiduciaries.
The Defendants in the case are: the Delphi Corporation Board of Directors’ Executive Committee and its members; the Investment Policy Committee and its members; and J.T. Battenberg III, Robert H. Brust, Alan S. Dawes, Susan A. McLaughlin, and John D. Opie (collectively, the “Delphi Officer and Director Defendants”), General Motors Investment Management Company (“GMIMCo”) and State Street Bank & Trust Company (“State Street”).
Settlement Update:On July 10, 2009, the parties to the Amended Stipulation entered into a Settlement Modification, which amended the Settlement as follows: First, substantial consummation of Delphi’s Plan of Reorganization is eliminated as a condition to the Effective Date of the Settlement. Rather, the Settlement would become effective upon the Court’s and the Bankruptcy Court’s approvals of the Settlement Modification (and the corresponding modification to the Securities settlement) becoming Final. Second, the Class’s Allowed Equity Interest would no longer be entitled to the same treatment as unsecured claims in the Delphi bankruptcy, unless unsecured claims receive full payment plus interest.
The Bankruptcy Court approved the Modification in July, 2009, and that approval is now Final. Accordingly, the Settlement, as modified by the Modification, will become effective, if the Court grants final approval to the Modification. Upon the Settlement becoming effective, Class Members will be able to receive the distribution of settlement funds which they are entitled to receive under the terms of the Settlement as modified.
On September 15, 2009, Plaintiffs filed their motion for preliminary approval of the Settlement Modification.
On September 23, 2009, the Court issued an order granting preliminary approval of the Settlement.
At the Fairness Hearing, held on November 16, 2009, the Court granted final approval of the ERISA Settlement Modification, and the ERISA Plaintiffs’ Motion for Fees and Costs was taken under advisement.