- Ruling against the United Auto Workers (UAW) and in favor of GM, the Sixth Circuit held the 2009 Retiree Settlement Agreement (2009 RSA) extinguished an obligation for New GM to pay $450 million under a 2009 Master Sale and Purchase Agreement (MPA). The MPA was executed during the bankruptcy of GM by Old GM (the pre-bankruptcy entity) and New GM (the post-bankruptcy entity). The Sixth Circuit held that, under the MPA, New GM assumed Old GM's obligation to pay the $450 million, reversing the District Court on that point, but it did not make a difference due to the Sixth Circuit's interpretation of the 2009 RSA.
- Procedural context:
- Delphi, a former GM subsidiary, filed for bankruptcy in 2005. Old GM agreed to pay amounts for retiree healthcare benefits and entered into a 2007 Memorandum of Understanding (MOU) with Delphi and the UAW in which Old GM committed to pay $450 million to settle claims of the UAW. Old GM and Delphi entered into other agreements in 2007 and 2008 culminating with the approval of a Global Settlement Agreement in 2008 by the bankruptcy court handling Delphi's case. In 2009 GM and UAW entered into the 2009 RSA. In 2010 UAW sued New GM in District Court in Michigan claiming New GM owed the $450 million. GM's bankruptcy court ordered that litigation to proceed. On cross-motions for summary judgment the District Court granted GM's motion for summary judgment and denied the motion for summary judgment of the UAW.
- UAW asserted a claim against Delphi in Delphi's bankruptcy on behalf of the hourly workers of Delphi for unpaid retiree benefits. GM agreed to pay part of the retiree benefits if the UAW cooperated with Delphi's reorganization. The parties' agreements were confusing and in GM's bankruptcy neither party explicitly took a position on the claim for the $450 million. The UAW demanded payment, GM refused, the UAW sued, GM tried to retreat to the bankruptcy court, it abstained, and the District Court eventually ruled for GM.
- Boggs, Sutton and Stranch, Circuit Judges.
In re Myron Hale
Summarizing by Joel Newell
3145 in the system
1 Being Processed