Contact: John Hartgen
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(703) 739-0800
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href='mailto:jhartgen@abiworld.org'>
color='#0000ff' size='3'>jhartgen@abiworld.org
ABI QUICK
POLL RESPONDENTS CLOSELY DIVIDED OVER WHETHER PREMIUMS OWED TO PBGC FOR
TERMINATED PENSION PLAN TERMINATED DURING CHAPTER 11 ARE DISCHARGABLE
PRE-PETITION CLAIMS
size='3'>July 31, 2009, Alexandria, Va.
size='3'>—Respondents in a recent ABI Quick Poll were closely
divided over whether premiums due to the Pension Benefit Guarantee Corp.
(PBGC) by a debtor regarding a pension plan terminated during its
chapter 11 case are pre-petition claims that are discharged. Forty-five
percent of respondents agreed that they are pre-petition claims, while
41 percent disagreed. Thirty percent “strongly agreed” and
fifteen percent “agreed somewhat,” while 31 percent
“strongly disagreed” and 10 percent “disagreed
somewhat.” Eleven percent did not know or had no opinion on the
issue.
The U.S. Court of Appeals for
the Second Circuit ruled in April that premiums due by a chapter 11
debtor to the PBGC for termination of a pension plan during the
bankruptcy do not arise until after the bankruptcy proceeding itself is
terminated. This is pursuant to the language of the Deficit Reduction
Act of 2005 (DRA), which provides for these premiums and was meant to
protect the PBGC from employer bankruptcies. Thus, the premiums are not
a pre-bankruptcy claim that was discharged. Prior to the DRA, a pension
plan termination in a chapter 11 proceeding usually gave the PBGC only a
dischargeable general unsecured claim on which it did not recover much
of the original premium amount.
ABI members and members
of the public were welcome to submit their response to the statement:
“The bankruptcy court erred in holding that payments due the
Pension Benefit Guaranty Corporation as a result of an employer's
termination of a pension plan while undergoing reorganization in
bankruptcy are dischargeable, contingent pre-petition claims.
PBGC v. Oneida Ltd.,
562 F.3d 154 (2d Cir. Apr. 8,
2009).”
ABI’s Quick Poll is
posted on ABI’s home page,
href='http://www.abiworld.org/'>
size='3'>www.abiworld.org
size='3'>. ABI members and the public are invited to respond to a
question on a timely bankruptcy or insolvency issue. Visit
href='http://www.abiworld.net/quickpoll/'>
color='#0000ff' size='3'>http://www.abiworld.net/quickpoll/
to access the results of previous
ABI Quick Polls.
###
ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to insolvency.
ABI was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The ABI membership includes more than
12,000 attorneys, accountants, bankers, judges, professors, lenders,
turnaround specialists and other bankruptcy professionals, providing a
forum for the exchange of ideas and information. For additional
information on ABI, visit www.abiworld.org. For additional conference
information, visit
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