Pension agency to go to court vs Delphi, GM: report

Thu Sep 11, 2008 4:44am EDT, Reuters

(Reuters) - The U.S. government's pension insurance agency has told bankrupt auto parts maker Delphi Corp (DPHIQ.PK: Quote, Profile, Research, Stock Buzz) it would go to court on Friday to secure a claim on an additional $900 million in Delphi assets, The Wall Street Journal said.

The move comes after Delphi missed payments of several hundred million dollars to its pension plan in June and July. The new claims involve Delphi's foreign operations, which are believed to be profitable.

On Tuesday, the Pension Benefit Guaranty Corp (PBGC) sent its second letter to executives of Delphi and former parent General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) urging GM to absorb at least $1.5 billion in Delphi pension obligations before September 30.

According to the PBGC, the September 30 deadline is important as after that a new pension law will take effect and will make a deal much more costly.

The first letter was sent in mid August but PBGC felt GM and Delphi were dragging the process by missing some previous dates to complete a transfer of pension obligations.

The agency will hold off on the $900 million claim if GM and Delphi file documents with the U.S. Bankruptcy Court by Friday and GM agrees to absorb between $1.5 billion and $3.4 billion in Delphi pension liabilities, PBGC Director Charles Millard told the paper.

PBGC, GM and Delphi were not immediately available for comment.

(Reporting by Sweta Singh in Bangalore; Editing by David Holmes)

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