The PBGC will pay retirement benefits for 2,101 people covered by the APL/NVF Consolidated Pension Plan, which is sponsored by the estate of businessman Victor Posner. The New York Times called Posner “a master of the hostile takeover from the mid-1960’s until the early 1990’s.” The newspaper reports Posner at certain times controlled public companies such as the Arby’s restaurant chain, Royal Crown Cola and Sharon Steel. He mismanaged many of these companies into bankruptcy but enriched himself as they foundered, and he was forced to sell others at a discount.
“Even as shareholders suffered, Posner was one of America’s highest paid executives for years, drawing millions of dollars in annual salaries from the corporations he ran,” the newspaper says. Posner faced legal problems, was charged with tax evasion and involved in lawsuits regarding mismanagement of one business and a secret attempt to gain control of another.
In December 1993, a federal district court in New York banned Posner and his son from any further involvement with public companies. The judge also ordered them to give up control of their remaining public companies. However, the New York Times notes Posner was also an active and generous philanthropist for causes and institutions in the Miami area.
The PBGC said it is stepping in because the assets of the Posner estate are being distributed by a Florida probate court, and the pension plan will be abandoned. The APL/NVF Consolidated Pension Plan will end as of July 31, 2014.
Employees and retirees who are participants in the nine pension plans that were merged into the APL/NVF Consolidated Pension Plan will also continue to receive benefits from the estate until PBGC assumes responsibility. The nine pension plans include:
- Holyoke, Massachusetts Plant of NVF Company Pension Plan;
- Pension Plan for Hourly Paid Employees of the NVF Company Plant in California;
- Pension Plan for Hourly Paid Employees of the NVF Company Plant in Delaware and Pennsylvania;
- Pension Plan for Hourly Paid Employees of the NVF Company Plant in Illinois;
- Employees' Pension Plan of NVF Company;
- Evans Tempcon Inc. Grand Rapids Pension Plan;
- APL Shelter Products Corp., Employees' Retirement Plan;
- Riviera Cabinets, Inc. Lancaster Pension Plan Agreement; and
- Riviera Cabinets, Inc. Red Wing Pension Plan Agreement.
According to PBGC estimates, the APL/NVF Consolidated Pension Plan is 39% funded with $25 million in assets to pay $63.9 million in benefits. The agency is expected to cover the entire $38.8 million shortfall.