US judge says GM doesn not have to pay old-GM retirees’ medical benefits

Article by Christian A., on December 12, 2013

United States District Judge Avern Cohn in Detroit has ruled that General Motors Co. is not required to pay $450 million to cover medical benefits for its retirees. The judge said that the current GM did not assume any obligation for the payment, since it was contracted by the old GM before it filed for bankruptcy in June 2009.

The payment had been part of a June 2007 contract between the old GM, Delphi Corp. and the UAW. But the payment was excluded in another contract over medical benefits inked in July 2009 by the new GM that emerged from Chapter 11. The UAW had claimed that the new GM owed the money by virtue of Delphi's own emergence from bankruptcy in October 2009.

Cohn, however, said the language of the 2009 contract was clear that GM did not owe the amount, adding that US Bankruptcy Judge Robert Gerber in New York, found the contract fair, reasonable and in retirees' best interests.

Cohn wrote in a 36-page decision that whether new GM has a moral obligation regarding the payment is another matter and not relevant.

"The UAW's efforts to turn the absence of language into language is reminiscent of the efforts to capture a 'will o' the wisp.'" Chapter 11 reorganizations can allow debtors to deny obligations predating their bankruptcy filings.

Topics: gm, united states

If you liked the article, share on:

Comments

Recommended

Audi’s intention to bring out the Renn Sport Racing version of the Q5 was made clear when it unveiled the Audi SQ5 at the 2017 Detroit Motor Show early this...
by - July 22, 2017
Kia’s Sorento midsize sports utility vehicle is reaching its mid-cycle for the 2018 model year. Thus, its fans, enthusiasts and satisfied customers are expecting the Sorento to receive an update...
by - July 22, 2017
The Lotus Evora Sport 410 astonished the world after arriving as the more powerful and lighter edition of the already impressive Evora 400. Now, Lotus Cars is throwing in another...
by - July 22, 2017
The Europe-bound WRC hatch developed by Toyota and Gazoo Racing team will be limited to just 400 examples as reported by AutoCar this week. Otherwise known as Gazoo Racing Masters...
by - July 21, 2017
Even cops get excited when they’re assigned to drive the best cars in the market. In Austria, police officers drive around in a Porsche 911 Carrera while in Milan, authorities...
by - July 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries