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Suit tries to recoup Chrysler pensions

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Suit tries to recoup Chrysler pensions

Former workers target Daimler, Cerberus for pay lost in bankruptcy

Alisa Priddle / The Detroit News

A class action suit was filed Friday against Daimler AG and Cerberus Capital Management LLP on behalf of former Chrysler and DaimlerChrysler employees who lost some of their pensions with the bankruptcy of the former Chrysler LLC.

The suit represents more than 450 former employees and managers who lost supplemental pensions during Chrysler's reorganization and bankruptcy last year.

The guaranteed pensions were set up by the company as a private benefit, and therefore not protected by the government's underwriter, the Pension Benefit Guaranty Corp.

They were not transferred to the new Chrysler Group LLC that was formed after bankruptcy, June 10, 2009, with partner Fiat SpA.

DaimlerChrysler was the owner of the automaker until it sold it to Cerberus in 2007; Cerberus ran the company until bankruptcy.

The suit was filed in Wayne County Circuit Court by attorneys Sheldon Miller of Farmington Hills and Mayer Morganroth of Birmingham in an attempt to recoup a percentage of earned retirement pensions for employees who were led to believe their pensions would be intact when they retired.

"The direct financial loss, in combination with the serious reduction in medical, health care and auto benefits resulting from the bankruptcy, is causing them to make drastic changes to their retirement plans at a time when they can't go out and find other jobs to supplement their incomes," Miller said in a statement.

"These are good, hard working people who are being severely punished through absolutely no fault of their own."

The attorneys say there are no plans to take any action against the new Chrysler.

"Everybody involved in this suit loves that company and like everybody else wants to see it succeed," Miller said.

"The plaintiffs in our case are trying to assure that there won't be similar hardships for Chrysler's current employees, many of whom worked for and with the people involved in this suit.

"Nobody wants to hurt them or the new company's chances for success," he said.

Cerberus spokesman Peter Duda said the company does not comment on pending litigation.

From The Detroit News: http://www.detnews.com/article/20100911/AUTO01/9110322/1148/auto01/Suit-tries-to-recoup-Chrysler-pensions#ixzz0zQBr48sN

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DAIMLER, CERBERUS SUED BY FORMER CHRYSLER WORKERS OVER LOST PENSIONS

By Mark Kleis

Like many former bond holders from General Motors, over 450 former Chrysler workers learned the hard way that "guaranteed" doesn't always mean guaranteed, and as a result have filed a lawsuit against old-Chrysler owners Daimler AG and Cerberus Capital Management LLP.

The lawsuit aims to right the failure to uphold funds that were privately held in guaranteed pensions prior to the bankruptcy of Chrysler, and with the bankruptcy of Chrysler, were not passed on to the new Chrysler, says the Detroit News. The lawsuit names Daimler AG as DaimlerChrysler was the automaker's owner until Chrysler was sold to Cerberus Capital Management LLP in 2007. Cerberus ultimately ran the company until filing for bankruptcy and essentially forfeiting ownership to the U.S. government.

It is worth clarifying that the lawsuit does not name the new Chrysler in any way, and instead is going after the owners who were responsible for the funds while the employees were part of the company. The lawsuit, filed by attorneys Sheldon Miller and Mayer Morganroth aims to recoup a percentage of the retirement pensions which were completely lost during bankruptcy when they were not transferred to the new Chrysler.

"The direct financial loss, in combination with the serious reduction in medical, health care and auto benefits resulting from the bankruptcy, is causing them to make drastic changes to their retirement plans at a time when they can't go out and find other jobs to supplement their incomes," said Miller in a statement regarding the lawsuit.

Miller also made a point of explaining that the plaintiffs wish no bad will to the new Chrysler, and in addition to looking to regain some of their lost funds, they would like to make sure a similar situation doesn't face existing employees in the future.

link:

http://www.leftlanenews.com/daimler-cerberus-sued-by-former-chrysler-workers-over-lost-pensions.html

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