Practice Groups

Plan Funding and Restructuring
Representative Engagements

Our goal in addressing pension and health issues in bankruptcies, restructurings outside bankruptcy, and planning and executing business transactions is to control liabilities and maximize value. Over the past several years, we have:

•	Helped to win regulatory approval for a $10 billion stock and cash contribution to an automobile company’s pension plan—the largest transaction of its kind in history.

•	Managed the benefits issues for several large airline restructurings.

•	Negotiated mass withdrawals and satisfactions of withdrawal liability, contribution liability, accumulated funding deficiency and excise taxes for a number of multiemployer plans on the verge of insolvency.

•	Devised the strategy, with documentation, for the distress termination of a plan whose sponsor was in bankruptcy.

•	Negotiated distress terminations of plans whose sponsors were not in bankruptcy and settlement of related liability.

•	Developed a strategy for and negotiated terminations of overfunded plans to maximize the amount of the reversion of surplus assets.

•	Negotiated an expedited funding waiver for a plan on the eve of the contribution date, avoiding an accumulated funding deficiency and excise taxes.

•	Persuaded the PBGC that the agency should not take any action to require additional plan contributions or security for plan contributions with respect to a proposed corporate merger that resulted in the transfer of an underfunded pension plan to the new, merged entity.

The Negotiation of a Minimum Funding Waiver
The client, a not-for-profit company, faced minimum funding contributions to its underfunded, defined benefit pension plan that it could not afford. Facing a tenuous financial situation, the company sought our help in obtaining a distress termination outside of bankruptcy and the negotiation of termination liability to the PBGC.

After reviewing the company’s financial information, labor law issues and future prospects, we proposed and the company agreed, as a first step, to seek a waiver of minimum funding contributions due within the next few months. In seeking the waver application, we faced two significant hurdles: the company had no unsecured assets to pledge to PBGC, which is often a condition of a minimum funding waiver, and we had only 90 days to obtain the waver before contributions were due.

We developed materials supporting the minimum funding waiver, met with the IRS and PBGC, and assisted in negotiating releases from existing secured creditors to permit a second security interest in PBGC’s favor as a condition of the loan. The waiver was granted the day before the contributions were due.

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