DETROIT — Delphi Corp. investors won final court approval of a potential $284.1 million settlement of a class-action lawsuit filed against the largest U.S. auto-parts maker, former and current executives and company underwriters.
Investors sued in March 2005, claiming company officials “engaged in a wide-ranging fraudulent scheme” to inflate share prices by issuing misleading earnings statements. Troy, Mich.-based Delphi filed for bankruptcy about seven months later.
U.S. District Judge Gerald Rosen on Thursday granted final approval of the settlement reached in August. He also approved a separate $47 million settlement for current and former employees who invested in Delphi through their retirement plans. The settlements will require approval from the bankruptcy court.
“The settlements are fair, adequate and reasonable,” Rosen said in his 54-page order. “The proposed settlement in the securities fraud action will provide class members with a substantial recovery.”
Delphi intends to exit bankruptcy by the end of February if creditors and equity holders ratify its reorganization plan.
Voting on the plan ends today. A hearing on the plan is set for Jan. 17 before U.S. Bankruptcy Judge Robert Drain in Manhattan.
The lead plaintiffs in the shareholder class include the Mississippi Public Employees Retirees System and the Teachers Retirement System of Oklahoma.
