A government pension safety net will take responsibility for the pensions of more than 2,700 current and future retirees that will be left behind in connection with the sale of Walter Energy Inc., Dow Jones Daily Bankruptcy Review reported today. The Pension Benefit Guaranty Corp., the U.S. government's pension insurer, said yesterday that it will take over the underfunded plan, which is set to end today, and cover the $96 million shortfall between the plan's assets and the benefits owed to pensioners. Walter Energy sought chapter 11 protection in July, one of several coal miners that have turned to bankruptcy in the face of declining coal prices and substantial legacy liabilities. The Birmingham, Ala., company is preparing to sell its core Alabama mining operations to its lenders for $1.25 billion in debt forgiveness, subject to higher bids.
