On Monday, attorneys representing more than 100 former GM executives filed a suit against the automaker in an effort to recover pension benefits they lost as the company underwent restructuring bankruptcy in 2009.
The lawsuit, which was filed in the U.S. District Court in Detroit, asked that the court require the automaker to pay interest on lost benefits to retired and former GM and Saturn executives, and to ensure that all future retiree benefits will be paid.
The former executives represented in the suit include the former president of GM Latin America, Africa and Middle East, Richard Nerod and former head of Saturn, Don Hudler.
In a statement, GM said, “Sacrifices were made by every stakeholder, including former executives, to create a foundation upon which the new GM can thrive. We have not been served with the complaint, but these former executives previously requested that the administrator of the executive retirement plan review their entitlement to certain benefits.”
The automaker went on to say, “The administrator denied their claim after thoroughly reviewing the matter. We are confident that the plan administrator properly considered and denied their claim.”
As part of General Motors’ 2009 bankruptcy reorganization, former employees with annual pensions of more than $100,000 lost up to two-thirds of their benefits according to a story in The Detroit News. Former GM CEO Rick Wagoner saw his pension cut from about $20 million to about $8.5 million.
By terminating a portion of the Supplemental Employee Retiree Plan, GM reportedly saved $221 million.
In federal filings for last year’s public offering, GM claimed it had saved $4.6 billion by cutting retiree health care and pension benefits as it underwent bankruptcy reorganization.
The lawsuit filed last Monday by attorneys Brian Koncius and Kathleen Bogas claims that GM retirees first challenged the reduction in benefits in November of last year. The plaintiffs argued that the benefits being offered by GM were “substantially less” that what the automaker should have offered them.
The automaker failed to respond within the required 60 days which prompted the filing of an appeal with the automaker’s Executive Compensation Committee. That appeal was reportedly denied by the administrator of GM’s retirement plans, Janice Uhlig.
Last September, more than 450 Chrysler executives filed suit against Cerberus Capital Management and Daimler AG, claiming losses of about $100 million in supplemental pension benefits when the automaker underwent bankruptcy reorganization in 2009. Former Chrysler chairman Lee Iacocca was named as one of the plaintiffs in the class-action suit.
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