The Pension Benefit Guaranty Corp. is about to take over Reichhold Inc.’s retirement plan, which covers almost 4,500 current and former workers at the maker of polyester resins, saying that it’s underfunded by $97.4 million, Bloomberg News reported yesterday. A bankruptcy judge in Delaware last month approved the sale of Reichhold’s business, partly in exchange for $46 million in junior secured debt. After the sale is completed this month, the Durham, N.C.-based company won’t have any active operations. In October, the PBGC started the process of terminating the pension plan, whose benefits were frozen in December 2012. Reichhold arranged a Feb. 23 court hearing in Wilmington, Del., to seek approval of an agreement terminating the plan and handing the assets over to the PBGC. Under the agreement, Reichhold doesn’t acknowledge the accuracy of the PBGC’s underfunding estimate. The company said that no prospective buyers of the business would have assumed the pension plan and its liabilities. Including secured debt that was forgiven, the lenders paid $146.7 million. The junior noteholders will take over non-bankrupt affiliates through consensual foreclosure, using a sale structure laid out when the chapter 11 reorganization started last year.
