NEW YORK (AP) -- Attorneys representing a group of Delphi Corp.'s salaried retirees are appealing a bankruptcy judge's approval of the auto supplier's request to stop paying for their health care and insurance benefits.
In court filings with the U.S. Bankuptcy Court in Manhattan, law firms representing the Delphi Salaried Retirees Association ask that the appeal of Bankruptcy Judge Robert Drain's decision be heard by the U.S. District Court for the Southern District of New York.
Drain gave provisional approval to Delphi's request to terminate the benefits effective April 1 at a hearing last week, saying that Delphi has a right to amend the retirees' benefits. Drain will make a final ruling on Delphi's request at a March 11 hearing.
Delphi, which has been operating under Chapter 11 bankruptcy protection since 2005, says it needs to terminate the benefits as part of its plan to restructure and eventually emerge from bankruptcy protection.
The moves are expected to save the Troy, Mich.-based company more than $70 million a year and remove $1.1 billion in liabilities from its balance sheets.
But retirees argue that they should at least be allowed to negotiate some kind of a compromise with the company and that the elimination of the benefits would pose an extreme hardship on them.
Delphi salaried retirees hired before 1993 and their survivors currently receive health insurance benefits until the age of 65 when they become eligible for Medicare. Under the changes Delphi has requested, those retirees will be responsible for paying the full cost of their health insurance, which could amount to more than $1,000 per month for a retiree and spouse.
Drain's ruling doesn't affect retirees who were covered by union contracts. Delphi's unions made wage and benefit concessions in their 2007 agreements with the company.