PBGC Praises Pulp Manufacturer Bankruptcy Agreement

November 23, 2010 (PLANSPONSOR.com) – Pulp and paper manufacturer AbitibiBowater has agreed to retain all four of its defined benefit pension plans as part of its bankruptcy reorganization.

Josh Gotbaum, Director of the Pension Benefit Guaranty Corporation (PBGC), praised the Montreal-based firm for agreeing to keep its pension programs as part of its bankruptcy proceedings rather than transfer them to the PBGC to administer.

“Instead of ending its pensions, AbitibiBowater will keep them going. This is good news for the company’s 10,000 workers and retirees in the United States,” Gotbaum said in a news release. “They will keep their full retirement benefits under the protection of the PBGC’s insurance guarantee. It’s also good news because it keeps more than $380 million in underfunding from the PBGC’s books.  Our legal and financial team has worked step-by-step with the company to make this outcome possible.”

The company sought Chapter 11 protection in the U.S. Bankruptcy Court in Delaware in April 2009.

Since October 1, 2009, the agency has worked with more than 40 companies to help them reorganize with ongoing pension plans.