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"The Big 3 clamor to relieve themselves of the cost of retiree health care may be applauded by Wall Street and the investor class, but unions have a different responsibility and a different constituency.
We respectfully recommend that the GM UAW membership vote ‘NO’ and that the leadership instruct the workers to remain at work while they rejoin the negotiations to correct the VEBA mistake and other unjust concessions currently in the tentative agreement."
Paul Schrade, Warren Davis, Jerry Tucker
FactoryRat Voices
ON PREFERENTIAL HIRE AND PLACEMENT RIGHTS: "I think more detailed information and all the players in this sham deal should stand up and answer some questions." -JD-
Posted: Sat Feb 06, 2010 4:21 pm Post subject: Former Delphi Chief Was ‘Reckless,’ Judge Says
Former Delphi Chief Was ‘Reckless,’ Judge Says
By Margaret Cronin Fisk and Steven Raphael
Feb. 3 (Bloomberg) -- Former Delphi Corp. Chief Executive Officer J.T. Battenberg III was “reckless” in failing to ensure that financial forms he signed were accurate, a federal judge said today.
The U.S. Securities and Exchange Commission in 2006 sued Battenberg and other former Delphi executives, alleging they “engaged in one or more fraudulent accounting or disclosure schemes” before the auto-parts supplier filed for bankruptcy protection in 2005. The SEC claims Battenberg was responsible for the company’s materially misstating its financial condition.
“He was reckless in his failure” to understand the forms he was signing, U.S. District Judge Avern Cohn said at a hearing in federal court in Detroit today on motions to dismiss the lawsuit by Battenberg and four remaining defendants. “Doesn’t he have an obligation to ensure accuracy?” Cohn asked Battenberg’s lawyer.
Battenberg is an engineer and it was “unreasonable” to assume he knew more about financial rules than the company’s accounting firm and other experts, replied William Jeffress, his attorney.
Cohn didn’t make a decision today, saying he wanted more information from the defendants on the SEC allegations. He told the defendants to respond by March 5.
Delphi, once the largest U.S. auto-parts supplier, filed for bankruptcy in October 2005 after failing to win wage cuts and financial aid from its former parent, General Motors Co. The company emerged from bankruptcy under the new name of Delphi Holdings LLP in October.
Controller, Treasurer
Four other defendants, including Paul Free, former Delphi controller and chief accounting officer, and John Blahnik, former treasurer, are also seeking dismissal of the lawsuit. The SEC initially sued Delphi, which settled in 2006 without admitting any wrongdoing.
The SEC claimed Delphi artificially inflated share prices by issuing misleading statements in the years before the bankruptcy.
“In the fourth quarter of 2000, Delphi sold approximately $270 million of inventory to two third parties while simultaneously agreeing to repurchase the inventory in the following quarter for the original sales price,” the SEC said in its complaint.
“By improperly accounting for the transactions as true sales, rather than financing transactions, Delphi improperly recognized a material amount in cash flow from operations,” the SEC said. This resulted in a material overstatement in its reported income for that quarter, the government said in the complaint.
The lawsuit is SEC v. Battenberg, 2:06-cv-14891, U.S. District Court, Eastern District of Michigan (Detroit).
Cohn didn’t make a decision today, saying he wanted more information from the defendants on the SEC allegations. He told the defendants to respond by March 5.
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