In a suit filed Tuesday, the aluminum maker asked the US Bankruptcy Court in Wilmington, Delaware to extend some of the Bankruptcy Code’s protections to Trochus Insurance Co., of Bermuda, and Volta Aluminum Co. Ltd., of Ghana, Dow Jones reported. Unlike Kaiser and 26 other affiliates, Trochus and Volta aren’t under Chapter 11 protection.
Kaiser said in the suit that it has decided not to pay the $15.5 million due Wednesday to its salaried retirement plan, Dow Jones said. When the payment is missed, a lien enforceable by the PBGC will arise automatically on all the assets of Kaiser and some of its affiliates, including Trochus and Volta, Dow Jones reported.
While Kaiser and its bankrupt affiliates are protected from liens under the Bankruptcy Code’s provisions, the provisions don’t protect Trochus and Volta unless a bankruptcy judge says they do.
Nine Kaiser affiliates filed for Chapter 11 bankruptcy protection Tuesday to protect their assets from the liens. Kaiser and 17 affiliates had filed for Chapter 11 early last year amid significant near-term debt maturities, increased asbestos litigation, and growing retiree medical and pension obligations, Dow Jones reported.
In Tuesday’s suit, Kaiser asked the court to extend automatic stay provisions to Volta and Trochus, saying its ability to reorganize successfully could be hurt if the liens hit the two companies.
In a statement Tuesday, Kaiser said it has received a waiver from its debtor-in-possession lenders assuring that the additional Chapter 11 filings, the imposition of a lien and the failure to make the pension payment won’t affect the availability under the loan.