Compliance April 17, 2007

Collins & Aikman Corp. and PBGC Strike $96M Deal

April 17, 2007 (PLANSPONSOR.com) - Auto-parts maker Collins & Aikman Corp. has agreed to a $96 million settlement with the Pension Benefit Guaranty Corp. (PBGC) so that it will no longer be obligated to make payments to its pension plan.
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The agreement comes on the heels of the PBGC’s promise to absorb the bankrupt Michigan-based company’s pension plan, which the agency estimates is 58% funded, with $253 million in assets to cover $434 million in liabilities (See PBGC Steps in Again ). The PBGC expects to be liable for about $161 million of the of the $181 million shortfall.

The PBGC said it was stepping in because Collins & Aikman missed $7.6 million in required contributions to the plan – which covers about 21,000 employees and retirees – and intends to abandon the plan when it sells all of its assets, as spelled out in its bankruptcy proceedings.

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Under the $96 million settlement, the PBGC is supposed to receive an allowed administrative claim totaling $8.4 million that will be paid in cash on the day Collins & Aikman emerges from bankruptcy protection and will receive an allowed general unsecured claim of $87.8 million under the company’s Chapter 11 plan, the AP reported.

Collins & Aikman has been operating under Chapter 11 bankruptcy since May 2005, and is seeking approval of settlement with the PBGC, which plays a key role in the company’s plan to pay creditors, the company said Friday in court papers, according to the AP. The company said that the approval of the PBGC agreement by  Judge Steven Rhodes of the Detroit bankruptcy court will guarantee the agency’s support of the Chapter 11 plan and will get rid of the possibility that the PBGC will place any liens on the company’s Canadian properties.   

Collins & Aikman said the settlement calls for an involuntary termination of the pension plan as of March 31. Under this scenario the company doesn’t have to modify collective bargaining agreements with its unions to alter benefits members receive, according to the AP.

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Products April 16, 2007

AOL's Steve Case Embarks on Consumer Medical Web Site

April 16, 2007 (PLANSPONSOR.com) - America Online founder Steve Case is launching a consumer medical Web site that he hopes will be able to hold its weight in a market already heavy with players such as WebMD.com and NIH.gov.
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According to the New York Times, some of the features of RevolutionHealth.com include:

  • 1,500 medical conditions that can be sorted by the ailment or treatment, with related comments from experts and from other users of the site.
  • Information from the Mayo Clinic, Cleveland Clinic and Harvard Medical School, which also have their own popular Web sites.
  • A directory of doctors by specialty and location, along with short reviews by patients.
  • The ability for users to create their own pages within RevolutionHealth.com for collecting personal and general information, which they can keep private or share as they choose.

The site will have its official debut Thursday and is part of Revolution Health Group, which Case founded two years after AOL’s ill-fated merger with Time Warner. According to the newspaper, the company’s other medical ventures include a stake in the growing RediClinic chain of retail health clinics operating in some Wal-Mart stores, Walgreen’s and other retail outlets around the country.

The Web site will be aimed primarily at women, who make up the lion’s share of Web health users. The site will have a Mom Central page for busy mothers who are trying to juggle their health, their children’s health, etc.

RevolutionHealth.com will also promote personal health records by giving consumers a place to assemble their medical information, bringing the company in line with efforts by others such as WebMD.com and insurers such as Aetna, the Times reported.

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