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Welcome to the Delphi ERISA Settlement website.
This website is designed to keep class members informed about the In
re Delphi ERISA Litigation Class Action Settlement.
Background
Beginning on March 3, 2005, 15 putative class
action lawsuits were brought on behalf of a purported class of
individuals who are participants in or beneficiaries of the Plans
(Delphi Savings-Stock Purchase Program for Salaried Employees in the
United States; the Delphi Personal Savings Plan for Hourly-Rate
Employees in the United States; the ASEC Manufacturing Savings Plan;
and the Delphi Mechatronic Systems Savings-Stock Purchase Program)
alleging breaches of fiduciary duties in violation of ERISA (the “ERISA
Actions” and/or the “Delphi ERISA Actions”).
By Order dated September 13, 2005, Judge Paul D.
Borman of the United State District Court for the Eastern District of
Michigan appointed Christopher Glinka, Greg Bartell, Kimberly
Chase-Orr, Neal Folck, and Thomas Kessler as Named Plaintiffs to
prosecute the ERISA Actions on behalf of participants in the Plans
during the proposed class period, and appointed Keller Rohrback as Lead
Counsel in the ERISA Actions. Mr. Glinka later decided to not
participate as a Named Plaintiff. These actions were consolidated by
court order dated September 13, 2005, under Master File No. 05-CV-70882.
On October 8, 2005, Delphi filed for protection
under Chapter 11 of Title 11 of the United States Code (the Bankruptcy
Code) in the Bankruptcy Court.
On December 12, 2005, the Judicial Panel on
Multidistrict Litigation ordered the transfer of the Delphi ERISA
Actions, and other related federal actions including the Delphi
Securities Fraud Action, to the United States District Court for the
Eastern District of Michigan and assigned the case to the Honorable
Gerald E. Rosen for coordinated or consolidated pretrial proceedings.
On March 3, 2006, Greg Bartell, Kimberly
Chase-Orr, Neal Folck and Thomas Kessler, along with Donald McEvoy and
Irene Polito (hereafter “Named Plaintiffs”) filed a Consolidated Class
Action Complaint (the “Complaint”) alleging, among other things, that
Delphi, with the participation of others, improperly accounted for
various transactions and otherwise made material misstatements
regarding its financial condition and that the Defendants (Delphi
Corporation, J.T. Battenberg III, Allen S. Dawes, John D. Opie, Thomas
H. Wyman, Susan McLaughlin, Robert H. Brust, Delphi’s Investment Policy
Committee and its Members (John and Jane Does 1-10), General Motors
Investment Management Corporation (“GMIMCo”) and State Street Bank
& Trust Co. (“State Street”)) breached their fiduciary duties
to the Class in their management of the Plans and the Plans’ assets.
On April 12, 2006, the Defendants moved to dismiss
the Complaint. On May 12, 2006, Named Plaintiffs filed papers in
opposition to the motions to dismiss. On June 12, 2006, Defendants
filed their reply papers in further support of the motions to dismiss.
The Court has not ruled on these motions.
On July 11, 2007, the Court appointed the
Honorable Layn R. Phillips to act as Master for purpose of facilitating
settlement negotiations in this action. In July and August 2007, with
the guidance of Judge Phillips, the parties engaged in numerous
settlement discussions and meetings over the course of several days,
which resulted in the filing of a Settlement Stipulation with the Court
on August 31, 2007.
The Settlement Agreement would release all
Defendants other than State Street. Lead Counsel continues to pursue
claims against Defendant State Street.
The Class
U.S. District Judge Rosen has conditionally
certified that this Settlement shall proceed on behalf of everyone who,
subject to certain exceptions identified below, fits the following
description:
All persons (a) who were (i) participants in or
beneficiaries of the Delphi Savings-Stock Purchase Program for Salaried
Employees, the Delphi Personal Savings Plan for Hourly-Rate Employees,
or the ASEC Manufacturing Savings Plan between May 28, 1999 and
November 1, 2005, or (ii) participants in or beneficiaries of the
Delphi Mechatronic Systems Savings-Stock Purchase Program between June
1, 2001 and November 1, 2005, and (b) whose accounts included
investments in the Delphi and/or GM Stock Funds. Excluded from the
Class are (i) the Defendants; (ii) members of the immediate families of
each of the Defendants; (iii) any entity in which any Defendant has a
controlling interest; (iv) any parent, subsidiary or affiliate of a
Defendant; (v) any person who was an officer or director of a Defendant
or of any of Defendants subsidiaries or affiliates during the Class
Period; and (vi) the legal representatives, heirs, predecessors,
successors or assigns of any such excluded person or entity.
The Settlement
The Court has not decided in favor of Plaintiffs
or the Settling Defendants. Instead, both sides agreed to the
Settlement to ensure a timely and fair resolution of Plaintiffs’ claims
and avoid the cost and risk of further litigation. The Named Plaintiffs
and the Settling Defendants, through their counsel, have conducted an
extensive investigation of the allegations in the Action and evaluated
its merits. With the assistance of counsel and an independent mediator,
the Parties have also engaged in substantial arm’s-length negotiations
to attempt to resolve all claims that have been or could have been
asserted in the Action against the Settling Defendants.
As part of the Settlement, the Settling Defendants
agree to pay $47,000,000, consisting of approximately $22,500,000 in
cash to be paid from available insurance policies, and an “allowed
interest” in the Delphi Corporation Chapter 11 case in an aggregate
amount that Lead Counsel expect to be valued at approximately
$24,500,000. The proportion of cash and securities will be the same as
that for holders of allowed general unsecured claims under the plan of
reorganization.
The net amount of the Settlement, including
interest, and after payment of and establishment of reserves for any
taxes and Court-approved costs, attorneys’ fees, and expenses,
including any Court-approved compensation to be paid to the Named
Plaintiffs, will be paid to the Plans and, after payment of
implementation expenses, the remaining amount will be allocated to the
Plan accounts of members of the Settlement Class according to a Plan of
Allocation to be approved by the Court. If necessary, a Plan account
will be created for those members of the Settlement Class who no longer
have Plan accounts.
On September 5, 2007, the Court entered an Order
Preliminarily Approving the Settlement. At the Fairness Hearing, to be
held on November 13, 2007 at 9:30 a.m., the Court will decide whether
to approve the Settlement, to establish a reserve of 25% of the Gross
Settlement Fund for a potential award of attorneys’ fees and expenses,
and whether to grant each Named Plaintiff a case contribution award of
up to $5,000 payable from the Gross Settlement Fund. For more
information about the Settlement and the Fairness Hearing, see sections
13-16 of the Notice of
Settlement & Bar Order.
Settlement FAQ:
Q: How do I know if I am part of the
settlement?
A: The proceeds of this
Settlement will be allocated only to Class Members, and then only
according to the Court-Approved Plan of Allocation. You are a Class
Member if you fall within the “Settlement Class” approved by U.S.
District Judge Rosen:
All persons (a) who were (i) participants in or
beneficiaries of the Delphi Savings-Stock Purchase Program for Salaried
Employees, the Delphi Personal Savings Plan for Hourly-Rate Employees,
or the ASEC Manufacturing Savings Plan between May 28, 1999 and
November 1, 2005, or (ii) participants in or beneficiaries of the
Delphi Mechatronic Systems Savings-Stock Purchase Program between June
1, 2001 and November 1, 2005, and (b) whose accounts included
investments in the Delphi and/or GM Stock Funds. Excluded from the
Class are (i) the Defendants; (ii) members of the immediate families of
each of the Defendants; (iii) any entity in which any Defendant has a
controlling interest; (iv) any parent, subsidiary or affiliate of a
Defendant; (v) any person who was an officer or director of a Defendant
or of any of Defendants subsidiaries or affiliates during the Class
Period; and (vi) the legal representatives, heirs, predecessors,
successors or assigns of any such excluded person or entity.
Q: How much will my payment be?
A: Plaintiffs will submit a
detailed Plan of Allocation to the Court for approval prior to the
Fairness Hearing. The Plan of Allocation will describe the manner by
which the Settlement proceeds paid into the Plans (the “Net Settlement
Fund”) will be distributed to Class Members. In general terms, the Net
Settlement Fund will be allocated to Class Members on a pro
rata basis such that the amount received by each Class Member
will depend on his or her calculated loss compared to the total losses
sought to be recovered in the Delphi ERISA Action from the Settling
Defendants. Because the Net Settlement Fund is less than the total
losses alleged to be suffered in the Delphi ERISA Action, each Class
Member’s proportionate recovery will be less than his or her alleged
loss. If your proportionate recovery is a nominal amount (less than $10
or such other amount as is approved by the Court), it may be forfeited
to the Plans or distributed pro rata to other Class
Members. You are not responsible for calculating the amount you may be
entitled to receive under the Settlement. This calculation will be done
as part of the implementation of the Settlement, and will be based on
reasonably available data from the Plans.
Q. When would I get my payment?
A: Payment is conditioned on
several contingencies, including the Court’s approval of the Settlement
and such approval becoming Final and no longer subject to any appeals
to any court; as well as the receipt of the proceeds of the allowed
interest under the Delphi Plan of Reorganization. In addition, as
described in the answer to Question No. 6 of the
Notice of Settlement & Bar Order, for so
long as any claim is pending in the Delphi ERISA Action against any
Barred Person (as defined in the Settlement Stipulation), distributions
from the Net Settlement Fund will not be made to the extent they would
reduce the balance in the Net Settlement Fund below the aggregate
damages amounts being sought from Barred Persons in the Delphi ERISA
Action. Subject to these limitations, and upon satisfaction of various
conditions, the Net Settlement Fund will be paid to the Plans and
allocated to the accounts of members of the Settlement Class pursuant
to the Plan of Allocation (described in the Answer to Question No. 7 in
the Notice of
Settlement & Bar Order) as soon as possible
after final approval has been obtained for the Settlement (which
includes affirmation on appeal, if any, and includes approval by the
Bankruptcy Court and the affirmation upon appeal, if any, taken
therefrom). Any appeal of the Court’s final approval or bankruptcy
court approval could take several years. Any accrued interest on the
Net Settlement Fund will be included in the amount paid to the Plans
and allocated to the Plan accounts of members of the Class. The
Settlement may be terminated on several grounds, including if the Court
does not approve or modifies the Settlement. Should the Settlement be
terminated, the Delphi ERISA Action would proceed as if the Settlement
had not been reached.
If you have any questions about the In
re Delphi ERISA Class Action Settlement, please send an email
to
claimsadministrator@delphisettlement.com. This
email will be directed to the individuals handling the Settlement. Lead
Counsel has also set up a toll free number 1-877-296-9982,
if you prefer to call with your questions.
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