Delphi Reaches Settlement Agreements of Class Action Lawsuits
TROY, Mich. — Delphi Corp. (PINKSHEETS: DPHIQ) has reached a settlement agreement with the lead plaintiffs in class action lawsuits brought by participants in its employee retirement plans and purchasers of its debt and equity securities from March 2000 to March 2005.
Under the settlement agreements, which remain subject to federal bankruptcy court and federal district court approval, the class of participants in Delphi’s employee retirement plans will receive an allowed interest in Delphi’s Chapter 11 case in the amount of $24.5 million and $22.5 million in cash from insurance carriers. Additionally, the class of purchasers of Delphi’s debt securities will receive an allowed claim and the class of purchasers of Delphi’s equity securities will receive an allowed interest in the combined amount of $204 million in Delphi’s Chapter 11 case as well as approximately $90 million in cash from other defendants and insurance carriers. The allowed amounts in Delphi’s Chapter 11 cases will receive the same plan currency and the same treatment as Delphi’s general unsecured creditors.
The lawsuits followed the company’s announcement in March 2005 that it would restate its financial results. These settlements would resolve these class-action lawsuits against Delphi and certain of the other defendants in the lawsuits. The final settlements provide a dismissal with prejudice of these class action lawsuits and a full release as to certain named defendants, including Delphi, Delphi’s current directors and officers, and certain third-party defendants and will also resolve certain derivative and other claims in Delphi’s chapter 11 cases.
“Last year, Delphi settled with the Securities and Exchange Commission, and now we are pleased to have reached settlement agreements in these cases, which we believe will allow us to close this chapter in our history and move forward,” said David M. Sherbin, Delphi vice president and general counsel. “This is another important step in our transformation process, which ultimately brings us closer to emergence from bankruptcy.”
These settlements are subject to the approval of the U.S. District Court for the Eastern District of Michigan and the U.S. Bankruptcy Court for the Southern District of New York. The District Court has scheduled a hearing on Nov. 13, 2007 to consider final approval of the settlements. Delphi expects to file an approval motion in the U.S. Bankruptcy Court on Sept. 7, 2007, which would be scheduled for final hearing at the Sept. 27, 2007 omnibus hearing.
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