Delphi benefit termination appeal settlement approved

By Caroline Salls

Pittsburgh, April 3 - Delphi Corp. obtained court approval of a settlement of appeals related to the company's termination of employer-paid post-retirement health care and life insurance benefits for some salaried employees and retirees, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Delphi received provisional court approval on Feb. 24 to terminate the benefits.

The settlement resolves appeals of the termination order filed by the committee of eligible salaried retirees and the Delphi Salaried Retirees' Association.

Under the settlement:

• The company will make $8.75 million in overall subsidy payments to the retirees committee for the benefit of salaried retirees, comprised of a $1 million hardship fund, payable at the beginning of May; $500,000 Voluntary Employees' Beneficiary Association set-up costs, payable at the beginning of May; $1.25 million per month for five months, payable monthly at the beginning of each of June through October; and one final payment of $1 million on Nov. 1, 2009;

• Through June 30, Delphi will offer salaried retirees a non-retroactive benefits reinstatement opportunity as of the first of the following month;

• The company's plan of reorganization will provide for the continuation of the payment of any unpaid subsidies after the plan effective date;

• Delphi will pay up to an additional $250,000 in attorneys' fees to counsel for the committee and the association, payable 60 days after submission of account statements;

• The company will instruct group life insurance provider MetLife to allow retirees to continue their current level of optional term life insurance coverage without the need to re-qualify by providing medical information, and Delphi will request that MetLife return all copies of health questionnaire information provided by the retirees to continue the benefit; and

• The termination appeals will be withdrawn after payment of the amounts due at the beginning of May.

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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