Over 450 former employees have sued both Daimler AG and Cerberus Capital Management regarding the loss of pensions in a "guaranteed" pension fund due to bankruptcy.
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.
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