(Reuters) — A federal judge said General Motors Co. is not required to pay $450 million to cover medical benefits for retirees, in a defeat for the UAW.

GM doesn’t owe $450M in retiree medical benefits, judge rules

Automotive News | December 11, 2013 – 12:30 pm EST

(Reuters) — A federal judge said General Motors Co. is not required to pay $450 million to cover medical benefits for retirees, in a defeat for the UAW.

In a 36-page decision, U.S. District Judge Avern Cohn in Detroit said on Tuesday that the current GM did not assume any obligation for the payment, which the automaker had contracted to make two years before its June 2009 bankruptcy filing.

The payment had been part of a June 2007 contract between the old GM, its former Delphi Corp. affiliate and the UAW.

It was not, however, included in a different contract over medical benefits signed in July 2009 by the GM that emerged from Chapter 11.

The UAW claimed that the new GM owed the money by virtue of Delphi’s own emergence from bankruptcy in October 2009.

Judge Cohn, nonetheless, said the language of the 2009 contract made clear that GM did not owe the payment.

He added that U.S. Bankruptcy Judge Robert Gerber in New York, who oversaw GM’s bankruptcy, found the contract fair, reasonable and in retirees’ best interests.

“Whether New GM has a moral obligation regarding the payment is another matter and not relevant,” he wrote. “The UAW’s efforts to turn the absence of language into language is reminiscent of the efforts to capture a ‘will o’ the wisp.'”

Andrew Roth, a partner at Bredhoff & Kaiser in Washington, D.C., representing the UAW, did not immediately respond to requests for comment.

The UAW was also not immediately available for comment. GM spokesman Dave Roman declined to comment.

Chapter 11 reorganizations can allow debtors to reject obligations that predate their bankruptcies.

On Monday, the federal bailout of GM ended when the U.S. Department of the Treasury said it had sold the last of its shares of the automaker.

Share
Login Status
You are not logged in.
Seniority Lists
Internal Job Postings
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone
Gary Goforth
Committee
Mike Danford
Danny Taylor
Steve Roberts
Jay Minella
Steve Homrich
Chris Brown
Richie Griffith

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Joe DiCataldo
Sgt. at Arms
Norman Jenks
Guide
Ken Buck
E-Board at Large (2)
Paul Taylor
Steve Roberts
GM Unit Chair
Mike Herron
Voith Unit Chair
Larry Heflin
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier