Delphi Corporation (OTC: DPHIQ) Investor Securities Class Action Lawsuit 03/07/2005

If you purchased Delphi Corporation securities, you might have certain options and should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to, or call us at (858) 779-1554.
Company Name(s): 
Delphi Corporation
Case Name: 
Delphi Corporation Shareholder Class Action Lawsuit 03/07/2005
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
Class Period Begin: 
Class Period End: 
Court of Filing: 
U.S. District Court for the Eastern District of Michigan
Deadline To File for Lead: 
Date Settled: 
Settlement Amount: 
Deadline to Participate in Settlement: 

January 26, 2012 - The court issued an additional and final order authorizing the further distribution of the net settlement fund.

September 2, 2010 - Numerous movants filed a notice of appeal.

July 9, 2010 - The court ordered the authorization of the distribution of the net settlement fund.

June 26, 2008 - The court approved the remainder of the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

February 1, 2008 - The plaintiffs filed a notice of voluntary dismissal against certain defendants.

January 23, 2008 - The court approved the partial settlement.

September 5, 2007 - The court preliminarily approved the settlement.

August 31, 2007- Parties filed a stipulation of settlement with certain defendants.

March 3, 2006 - The lead plaintiffs filed a consolidated amended complaint.

September 30, 2005 - The lead plaintiffs filed an amended complaint.

June 27, 2005 - The lead plaintiffs and lead counsel were appointed and all cases were consolidated.

May 6, 2005 - Lead plaintiff motions were filed.

March 25, 2005 - An additional investor filed another complaint.

March 10, 2005 - An additional investor filed a complaint.

March 8, 2005 - Another investor filed a complaint.

March 7, 2005 - An investor in shares of Delphi Corporation (OTC: DPHIQ) filed a lawsuit in the U.S. District Court for the Southern District of New York against Delphi Corporation over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between January 17, 2001 and March 3, 2005.

The complaint alleges that Delphi Corporation and other plan fiduciaries violated provisions of ERISA by negligently misrepresenting and negligently failing to disclose material facts to the plan and by negligently permitting the plan to purchase and hold Delphi Corporation stock when it was imprudent to do so. Specifically, the complaint alleges that defendants failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that improper accounting for off-balance sheet financing transactions in 2000 resulted in Delphi Corporation overstating cash flow from operations, determined in accordance with generally accepted accounting principles ("GAAP"), for that year by approximately $200 million; (2) that Delphi Corporation used sham sales of assets and other improper accounting maneuvers to inflate reported pretax earnings by a combined total of $166 million for the years 1999 to 2001. These moves increased cash flow from operations by a total of $446.5 million for 1999 through 2003; (3) that Delphi Corporation during the Class Period prematurely recognized revenue for technology contracts and rebates when it should have spread them over the life of the contract. Other times it improperly capitalized expenses over time, rather than recognizing them immediately. It also boosted cash flow from operations and pretax earnings by claiming it sold assets and inventory that it had actually agreed to buy back later; (4) that Delphi Corporation's financial statements were not prepared in accordance with GAAP; (5) that Delphi Corporation lacked adequate internal controls and was therefore unable to ascertain the true financial condition of tDelphi Corporation; and (6) that as a result, the value of Delphi Corporation's net income and financial results were materially overstated at all relevant times.

On October 18, 2004 (the "October 8-K"), Delphi announced that the Audit Committee of Delphi Corporation's Board of Directors was conducting an internal review into the accounting treatment accorded to certain transactions with suppliers, including those for information technology services. The internal review was initiated in response to an investigation commenced by the staff of the Securities and Exchange Commission ("SEC") that was disclosed on a Form 8-K filed on September 29, 2004. The decision to delay filing of the Form 10-Q was made in light of the ongoing SEC investigation and internal review, as well as the fact that Deloitte & Touche LLP ("Deloitte"), Delphi Corporation's independent registered public accounting firm, had informed Delphi Corporation that due to the ongoing status of the internal review by the Audit Committee of the Board of Directors, Deloitte has been unable to complete its review of the unaudited Consolidated Financial Statements for the three and nine months ended September 30, 2004.

On March 3, 2004, Delphi announced that, "Vice Chairman and Chief Financial Officer, Alan S. Dawes, is leaving Delphi Corporation and has resigned from its Board of Directors and its strategy board. Additionally, Delphi Corporation stated: "Mr. Dawes agreed to resign after the audit committee expressed a loss of confidence in him(.)" Additionally, Delphi Corporation stated it would restate results after finding accounting errors from 1999 to 2004. Delphi stated that it overstated cash flow from operations by $200 million in 2000 because of errors in off-balance sheet financing and overstated pretax income by $61 million in 2001 because of improper accounting for rebates. As a result, financial statements from 2001 on cannot be relied upon. Delphi had not yet determined which prior results will have to be restated, but it expects to complete the changes by June 30.

News of the above shocked the market causing the publicly traded shares of Delphi to fall $0.91 per share, or 14.29 percent, to close at $5.46 per share on unusually high trading volume.