The PBGC stepped in because Chardon Rubber, a designer and manufacturer of rubber and plastic components based in Chardon, Ohio, sold substantially all of its assets in bankruptcy proceedings and there will be no sponsor left to fund or administer the plan.
According to PBGC estimates, the Chardon Rubber Company Retirement Plan is 57% funded, with assets of $16.8 million to cover $29.5 million in benefit liabilities. The PBGC expects to be responsible for $12.4 million of the $12.7 million shortfall. The plan ended December 31, 2009, and the agency assumed responsibility for the plan on September 23, 2010.
Participants in the plan are subject to the benefit limits in effect when Chardon Rubber filed for bankruptcy protection on May 15, 2009, which set a maximum guaranteed amount of $54,000 per year for a 65-year-old.
The company experienced declining sales in 2007 and was unable to complete restructuring efforts due to the downturn in the real estate and credit markets in 2008. After entering into a sale agreement with Westinghouse Air Brake Technologies Corp., Chardon Rubber filed for Chapter 11 protection in the U.S. Bankruptcy Court in Cleveland, Ohio, the PBGC said