Judge Christopher Sontchi made the remarks in advance of a scheduled hearing on motions by attorneys for the retirees seeking to compel Van Buren Township, Mich.-based Visteon to restore benefits it terminated after Sontchi ruled in December that the company could do so.
A union representing some 2,100 people who worked at two Visteon plants in Indiana challenged Sontchi's ruling, and a federal appeals court panel overturned his decision last month. The panel ruled that Visteon could not terminate the retiree benefits without following certain procedures spelled out by the bankruptcy code.
While taking initial steps to restore the benefits, Visteon also challenged the appeal panel's ruling, which it described as "unique if not revolutionary" and conflicting with an earlier federal appeals court decision.
But Visteon's request for a hearing by the full appeals court was denied, and Sontchi said his reading of the panel's ruling left no doubt about what it meant.
"All retiree benefits that were terminated in December will need to be restored at some point, and that restoration will need to be backdated," Sontchi said.
The judge scheduled a hearing for Friday on how and when to restore benefits to retirees who worked at the shuttered Indiana plants and are represented by the Industrial Division of the Communications Workers of America, as well as United Auto Workers retirees who worked in Pennsylvania and Puerto Rico, and some 1,500 salaried retirees.
The judge declined a request by the salaried retirees to appoint an official committee to represent nonunion retirees in Visteon's bankruptcy, suggesting that doing so could interrupt the case schedule, which includes an Aug. 31 hearing on whether to confirm the company's reorganization plan.
"I have grave concerns about derailing the confirmation process in this case," Sontchi said. "I have grave concerns about keeping this company in bankruptcy longer than absolutely necessary."
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