Administration February 5, 2003

Plainwell, PBGC Work Out Pension Claims Deal

May 2, 2003 (PLANSPONSOR.com) - A bankrupt Minneapolis company is asking a US Bankruptcy Judge to approve a deal to settle its claims with the federal private pension insurance agency.
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Under the agreement, Plainwell would give the Pension Benefit Guaranty Corp. (PBGC) a general unsecured claim of $7,457,973 in the bankruptcy case, for unfunded benefits in the company’s six pension plans, according to a Dow Jones report. The PBGC also would get an administrative expense priority claim of $272,486 and a priority claim of $73,999 – both for unpaid minimum funding contributions.

If the court approves the motion at a hearing scheduled for Monday in Wilmington, Delaware, Plainwell would be released from all the PBGC’s claims against it. On April 7, 2001, PBGC filed 36 unliquidated proofs of claim on its own behalf and on behalf of Plainwell’s plans. Among the claims PBGC filed against Plainwell were some for unfunded benefit liabilities, one for unpaid minimum funding contributions and one claim for pension insurance premiums.

Plainwell filed for Chapter 11 bankruptcy protection on November 21, 2000, listing assets of $217.9 million and liabilities of $232.2 million.

The PBGC is an ERISA-established agency charged with protecting private-sector traditional defined benefit plans. Funded by insurance premiums paid by covered companies and PBGC’s investment income, the agency steps in to continue benefit payments for bankrupt or ailing companies.

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