Lee Iacocca and about 450 other Chrysler white-collar retirees have filed a class-action lawsuit in a Michigan court. The Plaintiffs, who say they lost a big chunk of their pensions when Chrysler went bankrupt, want their money back. The retirees lost more than $100 million in supplemental pension payments because of the 2009 bankruptcy. The lawsuit was filed against Daimler and Cerberus, former owners of old Chrysler. The new Chrysler was not named as a Defendant.
The lawsuit claims that neither former Chrysler owner Daimler nor Cerberus, which bought the company from Daimler and lost it in bankruptcy, properly safeguarded the funds for retirees – known as “Rabbi Trusts.” Such funds are not regulated by the federal Employee Retirement Income Security Act. Daimler or Cerberus could have switched the retired workers funds to annuities, the lawsuit argues, as Daimler did in 2005 for white-collar employees still working for Chrysler. Cerberus also did nothing to protect the accounts, the lawsuit says. Sheldon L. Miller, a Michigan lawyer, is handling this case for the Plaintiffs.
Source: USA Today