Delphi obtains provisional approval to cancel benefits for retirees

By Rebecca Melvin

New York, Feb. 24 - Delphi Corp. obtained provisional approval Tuesday to terminate its employer-paid post-retirement health care and life insurance benefits for some salaried employees and retirees in the U.S. Bankruptcy Court for the Southern District of New York.

This provisional approval was based on the court's finding that the company had met its evidentiary burdens, subject to the appointment of a retirees' committee to review whether it believes that any of the affected programs involved vested benefits (as opposed to "at will" or discretionary, unvested benefits), according to Delphi spokesman Lindsey Williams.

It will affect roughly 15,000 salaried retirees, according to court documents filed by the company's retirees.

The bankrupt auto-parts maker asked the court to eliminate company funding of OPEB effective April 1. The court also authorized Delphi to immediately begin the administrative process to implement these modifications, Williams said.

Affected salaried Delphi retirees will begin receiving appropriate information packages later this week, Williams said.

Two groups of Delphi retirees requested appointment of official committees to represent them.

"This group gave their human capital to the debtors and as part of their employment consideration they were promised retirement benefits, often in lieu of other direct benefits, such as increased salaries," the retirees said in a court filing.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

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