The Looting of the Delphi Pension Fund: Court Cases

There have been several court cases related to the Delphi pension fund scandal. One notable case was brought by a group of Delphi retirees who sought to recover their lost pension benefits. The case, known as Rouse v. UAW, alleged that the UAW and its officers breached their fiduciary duty by mismanaging and looting the Delphi pension fund. The retirees argued that the UAW's investment decisions resulted in significant losses for the pension plan, ultimately causing their benefits to be reduced or eliminated. The case was settled out of court in 2016, with the UAW agreeing to provide some monetary relief to the retirees.

Another case related to the Delphi pension fund scandal was brought by the Pension Benefit Guaranty Corporation (PBGC), a government agency that insures many private-sector pension plans. The PBGC sought to recover funds from the Delphi bankruptcy estate to cover the losses incurred by the underfunded pension plan. The case was settled in 2011, with the PBGC recovering $594 million from the Delphi estate to help cover pension benefits for the affected retirees.

In addition to these cases, there have been ongoing investigations and legal action related to the looting of the Delphi pension fund. The controversy surrounding the Delphi pension plan serves as a stark reminder of the importance of proper pension management and oversight, and the need to protect the retirement benefits of workers who dedicate their careers to a company or industry.

There are a few other court cases related to the Delphi pension fund scandal:

1. A class-action lawsuit was filed in 2011 by former Delphi workers alleging that the company and the UAW breached their fiduciary duties by failing to protect the pension fund. The lawsuit claimed that the UAW allowed Delphi to underfund the pension plan to support other investments, and that the company improperly transferred assets out of the fund. The case was dismissed in 2013.

2. In 2016, a federal judge approved a $120 million settlement to resolve a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Delphi Automotive and a former executive. The SEC had accused Delphi of accounting fraud and misleading investors about the company's financial condition leading up to its bankruptcy in 2005. The settlement included $100 million in penalties and disgorgement, and another $20 million to settle a related shareholder lawsuit.

3. The UAW itself has faced legal action related to the Delphi pension fund scandal. In 2019, the UAW settled a lawsuit brought by former Delphi workers who alleged that the union breached its duty of fair representation during the bankruptcy proceedings. The lawsuit claimed that the UAW conspired with Delphi and the federal government to undermine the workers' bargaining power and deny them their full pension benefits. The case was settled for an undisclosed amount.