DETROIT -- More than 100 former General Motors executives have sued the automaker in federal court to recover pension benefits reduced during the automaker's 2009 bankruptcy.
The retirees are trying to recoup all benefits, in addition to interest, and asked the court to order GM to accurately pay future retiree benefits, The Detroit News reported today.
The lawsuit was filed Monday in U.S. District Court in Detroit.
According to the complaint, retired and former executives suing the automaker include John Middlebrook, former vice president of vehicle brand marketing; Richard Nerod, retired president of GM-Latin America, Africa and Middle East; and Don Hudler, a retired vice president and former head of Saturn.
"Sacrifices were made by every stakeholder, including former executives, to create a foundation upon which the new GM can thrive," GM said in a statement. "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 administrator denied their claim after thoroughly reviewing the matter," GM said. "We are confident that the plan administrator properly considered and denied their claim."
Attorneys for the former executives, Kathleen Bogas and Brian Koncius, could not be reached for comment, The News said.
In June 2009, retired GM executives with annual pensions valued at more than $100,000 saw their benefits reduced by up to two-thirds as part of the company's bankruptcy reorganization, The News said.
Steep pension cuts
GM saved $221 million by ending a portion of its Supplemental Employee Retiree Plan, the paper said.
GM's top executives also saw their pensions cut by two-thirds. Former GM CEO Rick Wagoner's pension fell from roughly $20 million to about $8.5 million.
The automaker saved $4.6 billion by slashing pension and retiree health care outlays during its bankruptcy reorganization, GM disclosed in federal filings related to its initial public offering last year.
GM said it saved $2.7 billion by eliminating health care benefits for salaried retirees 65 or older and eligible for Medicare, and by capping the amount it will spend on health care for salaried retirees younger than 65.
According to the suit, the retirees first challenged the new pension benefits in November. At the time, they argued GM was providing benefits that "are substantially less than" what should be provided, according to the complaint filed in U.S. District Court in Detroit.
GM failed to respond to the retirees' challenge within 60 days, however, according to the lawsuit. So the retirees filed an appeal with GM's Executive Compensation Committee.
According to the suit, Janice Uhlig, administrator of the automaker's retirement plans, replied a week later and informed the former executives their claims were denied, according to The News.
In September 2010, more than 450 Chrysler executives, including former Chairman Lee Iacocca, filed a suit against Daimler AG and Cerberus Capital Management in Wayne County Circuit Court, claiming they lost millions of dollars in supplemental pensions during the automaker's bankruptcy.
The class-action lawsuit claims that Daimler and Cerberus, Chrysler's former owners, failed to properly protect supplemental pensions for retirees.
The executives lost their supplemental pensions during Chrysler's 2009 bankruptcy.
Overall, roughly $100 million was lost by the executives, the suit said.