GM Retirees Sue to Recoup Lost Pension Benefits after Chapter 11

A group of 100 General Motors executive retirees - including former Vice President of Brand Marketing, John Middlebrook; former President of GM-Latin America, Africa and Middle East, Donald W. Hudler; and former Saturn President, Don Hudler - filed a lawsuit against the company in May. The former executives claim that they lost a significant amount of their pension benefits as a result of GM's Chapter 11 bankruptcy filing.

In order to help save the company, General Motors was forced to slash billions of dollars of expenditures, including retiree health benefits and pensions, during the Chapter 11 reorganization. The bankruptcy was the third largest case in history.

"Abuse of Discretion"

In the retirees' lawsuit, filed in the U.S. District Court in Detroit, they claim that the reduction in their benefits was "arbitrary and capricious" and "an abuse of the discretion". As a result, according to the suit, General Motors may be in violation of the federal Employee Retirement Income Security Act (ERISA). GM, however, disputes this characterization, saying that these claims have no merit.

According to The Detroit News, GM spokesperson James Cain issued this statement on behalf of the company: "Sacrifices were made by every stakeholder, including former executives, to create a foundation upon which the new GM can thrive. We are confident that the plan administrator properly considered and denied their claim."

The plaintiffs are asking the court to return the money that they lost, as well as interest, which would allow them to collect larger payments in the future. They are also asking that General Motors reimburse them for the legal fees associated with the case.