DOW JONES NEWSWIRES

A group of retirees of Delphi Corp. (DPHIQ) filed suit Thursday, saying it needs an independent administrator to help stop the bankrupt auto supplier from terminating its pension plan for salaried employees and transferring the obligation to the Pension Benefit Guaranty Corp.

In a federal lawsuit filed in Michigan, the Delphi Salaried Retiree Association asked the court to replace its current trustees, who are Delphi executives, and appoint a new plan administrator "loyal only to us."

The suit also seeks an immediate injunction prohibiting the current plan administrator from negotiating a termination with the PBGC until this suit is concluded.

"We have serious concerns about whether Delphi executives can protect our pension rights while at the same time serving Delphi's shareholders and creditors," the retiree group said.

The group said it was not notified before Delphi announced its PBGC plan June 1.

Separately, the association filed an objection in the Delphi bankruptcy case to a provision stating the pension plan, by agreement, shall be terminated and transferred to the PBGC.

On Monday, General Motors Co. moved closer to buying its former parts unit Delphi when a bankruptcy judge said GM could move forward with a plan that will allow the auto maker to team up with a private-equity firm to buy Delphi and take it out of bankruptcy.

The deal, approved by Judge Robert Gerber of the U.S. Bankruptcy Court in Manhattan, is designed to ensure GM a steady supply of parts and allow Delphi to exit bankruptcy after nearly four years in Chapter 11.

But another New York bankruptcy judge, who is overseeing Delphi's bankruptcy case, also needs to sign off on the agreement. That hearing is scheduled for next week.

Meanwhile, Delphi's lenders said Thursday that they will bid for the auto-parts supplier this week and try to defeat the sale to GM and the private-equity firm.

One condition of the GM agreement is Delphi will not be on the hook for unfunded pensions for its hourly workers, an amount that totals about $3.2 billion. GM, Delphi and the government's pension watchdog are negotiating an agreement by which GM would assume some or all of those pension costs, court document show.

Delphi, which was spun off from GM in 1999 and filed for bankruptcy in 2005, has seen its value plunge amid falling auto sales and has struggled for more than a year to pull together the financing it needs to exit bankruptcy.

Delphi officials were not immediately available for comment.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com

(David McLaughlin contributed to this report.)