Retirees of Delphi Corp. lost a long-running lawsuit attempting to hold the federal pension insurance agency liable for its 2009 takeover of their pension plans, Bloomberg Law reported. The Pension Benefit Guaranty Corp. (PBGC) 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 that the PBGC should have used its negotiating leverage with General Motors Corp.—which owned Delphi before a 1999 corporate spin-off—to force GM to assume their pension liability. Tarnow disagreed, saying GM “repeatedly, and emphatically” declined to assume the Delphi pension liability. Judge 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, Judge Tarnow said.
