The Pension Benefit Guaranty Corporation didn’t need court approval before it terminated the Delphi pension plans and assumed liability for the benefits of about 70,000 workers and retirees, Senior Judge Arthur J. Tarnow of the U.S. District Court for the Eastern District of Michigan held March 22.
The retirees said the PBGC should have used its negotiating leverage with
Tarnow’s order, which granted summary judgment to the PBGC, also found the plan termination didn’t constitute a breach of fiduciary duty. That’s because the PBGC owed no fiduciary duties to the Delphi retirees until after the plan terminated and the PBGC became the plan sponsor, Tarnow said.
The controversy arises from the PBGC’s 2009 decision to take over more than $6.2 billion in new liabilities as the trustee of six Delphi pension plans. The retirees alleged that the PBGC improperly terminated the plans through an agreement with Delphi and GM following Delphi’s 2005 bankruptcy filing.
Jacob & Weingarten and Miller & Chevalier represented the retirees.
The case is Black v. PBGC, 2019 BL 100292, E.D. Mich., No. 2:09-cv-13616, 3/22/19.