Ruling Clears GM from Retiree Medical Benefits Claim

A Detroit court says General Motors Co. is not required to pay $455 million in medical benefits for retirees under a contract signed before the company went through bankruptcy in 2009, Reuters reports.

The contract involved the United Auto Workers union, the old GM and GM's former parts unit, Delphi Automotive plc. The payment was included in that agreement but not in the one signed in 2009 by post-bankruptcy GM.

The UAW argued that the new GM still owed the $455 million payment because Delphi also emerged from bankruptcy in 2009.

But U.S. District Court Judge Avern Cohn says that the new contract is clear that the new GM doesn't owe the $455 million. His 36-page decision chides the UAW's demand for payment as an attempt to "turn the absence of language into language."

Judge Cohn's ruling also notes that the New York judge who oversaw old GM's accelerated bankruptcy described the contract signed by the post-bankruptcy company as fair and in the retirees' best interest, Reuters adds.