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Administration July 9, 2010
Newspaper Pension Plans Blocked from Delaying Reorganization
July 9, 2010 (PLANSPONSOR.com) - A federal judge has rejected a move by employee pension plans at The Philadelphia Inquirer and the Philadelphia Daily News to delay the reorganization of the bankrupt media company.
Reported by Rebecca Moore
According to The Inquirer, Chief Bankruptcy Judge Stephen Raslavich denied the request to put the reorganization on hold while the pension plans appeal the bankruptcy plan in U.S. District Court. Under the reorganization, the new owners will be absolved of responsibility for funding pension shortfalls which the plans say could lead to insolvency and reduced benefits.
Raslavich said the pension plans, led by the Teamsters Union fund and including other employee funds, failed to make a strong case that they would suffer irreparable harm if the reorganization were completed, according to the news report. He said it is “clearly essential” to release the new owners from the $174 million in pension liabilities to complete the sale, as the alternative “almost certainly” would be the company’s liquidation.
The $174 million in unfunded liabilities is more than the company’s sale price.
In a related matter, The Inquirer reports that the company’s largest union, the Newspaper Guild, said it had tentatively reached agreement on a three-year pact that includes for the first time a 50% match for up to 6% of pay contributed to a company-sponsored 401(k) plan.