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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 and other case developments. UNITED
STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
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-------------------------------------- IN RE: DELPHI CORPORATION SECURITIES, DERIVATIVE & “ERISA” LITIGATION
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MDL No. 1725
Master Case No. 05-md-1725
Hon. Gerald E. Rosen
This Document Relates to:
In re Delphi Corp. ERISA Litigation,
Nos. 05-CV-70882,
05-70940, 05-71030,
05-71200, 05-71249,
05-71291, 05-71339,
05-71396, 05-71397,
05-71398, 05-71437,
05-71508, 05-71620,
05-71897, 05-72198 |
NOTICE OF PROPOSED MODIFICATION TO THE TERMS OF THE
SETTLEMENT WITH CERTAIN DEFENDANTS
This notice provides important information concerning proposed modifications
to the settlement with certain defendants (the “Settlement”) in the
above-captioned action (the “Delphi ERISA Action”) brought against Delphi
Corporation (“Delphi”) and other persons and entities under the Employee
Retirement Income Security Act (“ERISA”) with respect to the Delphi
Savings-Stock Purchase Program for Salaried Employees (the “Salaried Plan”), the
Delphi Personal Savings Plan for Hourly-Rate Employees (the “Hourly Plan”), the
ASEC Manufacturing Savings Plan (the “ASEC Plan”), and the Delphi Mechatronic
Systems Savings-Stock Purchase Program (the “Mechatronic Plan”) (collectively,
the “Plans”). Your rights may be affected by the settlement or the proposed
modifications. You should read this notice carefully.
TO: The “Class,” consisting of any person who was a
participant at any time between May 28, 1999 and November 1, 2005 in the Delphi
Savings-Stock Purchase Program for Salaried Employees (the “Salaried Plan”), the
Delphi Personal Savings Plan for Hourly-Rate Employees (the “Hourly Plan”), or
the ASEC Manufacturing Savings Plan (the “ASEC Plan”), or a participant at any
time between June 1, 2001 and November 1, 2005 in the Delphi Mechatronic Systems
Savings-Stock Purchase Program (the “Mechatronic Plan”) (collectively, the
“Plans”), whose account included investments in the Delphi and/or GM Stock
Funds; and, any beneficiary, alternate payee, representative, or
successor-in-interest of any such person.
If the description above applies to you, you may be part of the Class and may
have a right to know about the modifications to the Settlement of the Delphi
ERISA Action and about all of your options.
YOU ARE HEREBY NOTIFIED that Named Plaintiffs, on
behalf of themselves and the Class, and Delphi Corporation, ASEC Manufacturing
General Partnership (sued as “ASEC Manufacturing”), Delphi Mechatronic Systems,
Inc. (sued as “Delphi Mechatronic Systems”), the Delphi Corporation Board of
Directors Executive Committee and its members, the Investment Policy Committee
and its members, and the Delphi Officer and Director Defendants, have proposed a
Modification to the terms of the Settlement in the above-referenced Delphi ERISA
Action (the “Modification”) which has been presented to and preliminarily
approved by the Court. The Modification amends the Settlement terms set forth in
the Stipulation of Settlement With Certain Defendants – ERISA Action, dated
August 31, 2007 (the “Stipulation”), as amended by the parties on October 31,
2007 (the “Amended Stipulation”). Unless stated otherwise, all capitalized terms
herein are as defined in the Amended Stipulation, as modified by the
Modification.
A. PROCEDURAL
HISTORY OF THE SETTLEMENT
On August 31, 2007, the parties executed the
Stipulation, which provided for a final settlement and resolution of the Settled
Claims against the Released Parties. The Stipulation was subsequently amended by
the Amended Stipulation, dated October 31, 2007, and on November 13, 2007, after
notice was provided to the Class, the Court conducted a fairness hearing
concerning final approval of the terms of the Settlement set forth in the
Amended Stipulation. On January 23, 2008, the Court entered an Order and Final
Judgment granting final approval to the Settlement and dismissing with prejudice
the Complaint against all defendants other than State Street Bank and Trust
Company.
In the interim, on September 6, 2007, Delphi filed in
the Bankruptcy Court its Joint Plan of Reorganization (“Plan”) which included
the Stipulation as an exhibit thereto. Consistent with the Stipulation, on
September 7, 2007, Delphi filed a motion in the Bankruptcy Court seeking
approval of the Settlement. On October 29, 2007, the Bankruptcy Court
preliminarily approved the Settlement and scheduled the matter for final
consideration to be heard in conjunction with Delphi’s confirmation hearing
concerning the Plan.
On January 25, 2008, the Bankruptcy Court entered an
order confirming the Plan (the “Confirmation Order”) and approving the
Settlement as set forth in the Amended Stipulation.
B. REASONS FOR
AND TERMS OF THE MODIFICATION
1. Reasons for The Modification
Although approved by the Bankruptcy Court and the
Court, the Settlement could not by its terms become effective until the
Bankruptcy Effective Date, which would occur upon substantial consummation of
the Plan of Reorganization in Delphi’s bankruptcy proceeding. Although Delphi
has worked with its stakeholders to complete its restructuring efforts, the Plan
of Reorganization originally approved by the Bankruptcy Court in the
Confirmation Order entered in January, 2008, will not be consummated, and thus,
the Settlement cannot become effective according to its terms. As a result, the
parties to the Amended Stipulation determined that, based upon (i) the dramatic
change in Delphi’s circumstances since they entered into the Amended
Stipulation, including the catastrophic downturn in the economy, and in the auto
industry in particular, and (ii) the fact that the Bankruptcy Effective Date
will not occur with respect to the Plan that was the subject of the Confirmation
Order, it is in their best interests to enter into the Modification, to,
inter alia, make the releases granted in the Settlement effective, and to
allow for distribution to the Class of the cash held in escrow without regard to
consummation of Delphi’s Plan of Reorganization in the bankruptcy proceeding.
Without the Modification, the cash payments would remain in escrow indefinitely
and the Effective Date as originally contemplated would never occur. In sum,
this Modification will allow Class Members to finally receive distribution of
settlement funds that they are entitled to receive.
2. Terms of the Modification
On July 10, 2009, the parties to the Amended
Stipulation entered into the Modification, which amended the Settlement as
follows:
The Equity Interest granted to the Class pursuant to
the Amended Stipulation will remain allowed in the same aggregate face amount as
provided for in the Amended Stipulation, but will not be guaranteed any
particular treatment or classification, and instead will be a claim to be
classified under the Delphi Plan of Reorganization subject to further
modifications and/or rulings of the Bankruptcy Court except as to the aggregate
face amount thereof. Under the terms of Delphi’s new Plan of Reorganization
confirmed by the Bankruptcy Court in July, 2009, the Equity Interest has no
value.
The Modification further provides that the Settlement
will become effective upon the entry of an order by each of the Bankruptcy Court
and the Court approving the Modification (and the corresponding modification to
the settlement of the Delphi Securities Action), and such orders becoming Final,
independent of the occurrence of the Bankruptcy Effective Date and/or
substantial consummation of Delphi’s Plan of Reorganization.
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 approves the
Modification and that approval becomes Final. 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.
C. CLASS
MEMBERS’ RIGHTS AND OBLIGATIONS
A hearing will be held before the Honorable Gerald E.
Rosen in the United States District Court for the Eastern District of Michigan,
Southern Division, Theodore Levin Courthouse, 231 W. Lafayette Blvd., Detroit,
Michigan 48226 in Courtroom 733, at 1:00 p.m., on Monday, November 16, 2009
(the “Fairness Hearing”) to: (1) determine whether the Modification should be
approved by the Court as fair, reasonable and adequate; (2) determine whether
Judgment should be entered pursuant to the Modification; and (3) rule upon Lead
Counsel’s Motion for an Award of Attorneys’ Fees and Expenses, and upon such
other matters as the Court deems appropriate.
If you are a Class Member, you may object to any aspect
of the proposed Modification. To object, you must send a letter stating that you
are a Class Member, that you object to the Modification in In re Delphi
Securities, Derivative and ERISA Litigation, MDL No. 1725, Case No.
05-md-1725, and the reasons why you object. In your objection, you must include
your name, address, telephone number, and your signature. If you intend to
present any witnesses at the Fairness Hearing, you must also so state. Your
objection must be filed with the Court at the address below by November 2, 2009,
and received no later than November 2, 2009, by counsel listed below:
Clerk of the Court:
David J. Weaver, Clerk of Court
United States District Court, Eastern District of Michigan
231 West Lafayette Blvd., Fifth Floor
Detroit, MI 48226
Lead Counsel and certain Settling Defendants’ Counsel:
Lynn L. Sarko, Esq.
Gary A. Gotto, Esq.
KELLER ROHRBACK L.L.P.
1201 Third Avenue, Ste 3200
Seattle, WA 98101-3052
Plaintiffs’ Lead Counsel
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Stuart J. Baskin, Esq.
Brian H. Polovoy, Esq.
SHEARMAN & STERLING, LLP
599 Lexington Avenue
New York, New York 10022
Counsel to Settling Defendants
Delphi Corporation, ASEC Manufacturing General Partnership (sued as “ASEC
Manufacturing”), Delphi Mechatronic Systems, Inc. (sued as “Delphi
Mechatronic Systems”), the Investment Policy Committee, Robert H. Brust,
Susan A. McLaughlin, and John D. Opie |
D. ATTORNEYS’
FEES AND EXPENSES
In its January 23, 2008 Order and Final Judgment
approving the Settlement, the Court established a reserve of 20% of the Gross
Settlement Fund for a potential award of attorneys’ fees and a reserve of
$750,000 for costs and expenses, to be distributed upon further order of the
Court and Lead Counsel’s application for award of attorneys’ fees and expense to
be filed upon conclusion of the Delphi ERISA Action as to all parties. Lead
Counsel filed a Motion for an award of the amounts so reserved on September 16,
2009. It is anticipated that the Court will consider that Motion at the Fairness
Hearing.
GETTING MORE INFORMATION
This notice summarizes the proposed terms of the Modification. More details
are contained in Modification itself, which is available at
www.KellerSettlements.com, along
with the Amended Stipulation and the original notice mailed to the Class which
provide additional information concerning the Settlement. If you have questions
regarding how to obtain copies of documents related to the Settlement, you may
contact Lead Counsel at the address listed above or call toll free at (877)
296-9982.
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