The PBGC has formally taken control of Delphi Corp.'s U.S. defined benefit plans.
The Pension Benefit Guaranty Corp. on Monday became trustee of six Delphi plans, which totaled $6.1 billion, and retroactively terminated them as of July 31, according to a statement on Delphi's website. As part of the agreement, the PBGC also took responsibility for $50 million in pension obligations for four small Delphi defined benefit plans the company is keeping.
In all, the PBGC will be responsible for $6.25 billion of unfunded liabilities from the Delphi plans, making it the second-largest plan takeover by the Washington agency.
After more than two weeks of negotiations with Delphi, the PBGC withdrew lawsuits filed July 22 in various U.S. district courts that sought to name the PBGC as trustee of the Delphi plans and the approval to terminate them, PBGC spokesman Gary Pastorius confirmed in an interview. Mr. Pastorius noted that the PBGC typically negotiates with a company while it takes court action when it intends to take over pension plans.
Delphi, based in Troy, Mich., filed for Chapter 11 bankruptcy protection in 2005.