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Benefits March 6, 2006
Delphi Retirement Plan Participants Sue State Street
March 6, 2006 (PLANSPONSOR.com) - Delphi Corp.
employees are suing State Street Bank & Trust Company,
claiming they lost millions from their retirement plan when
State Street delayed selling Delphi stock as the company
approached bankruptcy.
Reported by Rebecca Moore
The Boston Business Journal (BBJ) reports that the class-action complaint said that, even after Delphi said it was probing its accounting practices and would have to restate earnings, State Street failed to sell the Delphi stock in the retirement plan or diversify the retirement plan investments.
“They did so despite the fact there were numerous red flags pointing to the company’s likely inability to service its debt based on historical and anticipated cash flows and despite the fact that the stock was no longer a prudent investment,” said the complaint cited by Bloomberg, according to the BBJ.
The complaint seeks reimbursement to the plan for losses, and names Delphi executives and General Motors Investment Management Corp as guilty of failing to protect participants’ interests as well.