by: Hon. J. Philip Klingeberger
U.S. Bankruptcy Court; Hammond, Ind.
Mark A. Berkoff
Dla Piper Us LLP; Chicago
Gary W. Burns
Walker Nell Consultants, Inc.; Philadelphia
Shawn M. Riley
McDonald Hopkins LLC; Cleveland
As a result of recent changes in both bankruptcy and pension laws, companies in financial distress now confront an altered landscape as they attempt to address legacy obligations—including pension benefits, workers’ compensation benefits and other retiree benefits. In an effort to relieve the financial burden placed on the Pension Benefit Guaranty Corporation (the “PBGC”), Congress amended the bankruptcy and pension laws so that a greater burden is now placed upon a bankrupt plan sponsor. Similarly, changes in other laws, as well as interpretation of priority rules, have altered the landscape with respect to workers’ ompensation insurance and other benefit plans. Termination of pension and legacy benefits has become more challenging and often more costly for debtors, while parties in interest seek to maximize their leverage.
Read the full article. (Materials from the 2007 Central States Bankruptcy Workshop)