Over the objection of PBGC, the U.S. Bankruptcy Court for the Eastern District of Missouri issued an opinion on October 26, 2005 finding that Falcon Products, Inc. and related debtors met the standard for reorganization distress termination of three defined benefit pension plans.

In re Falcon Products, Inc., No. 05-41108-399 (Bankr. E.D. Mo. Oct. 26, 2005). A debtor meets the reorganization distress test if the bankruptcy court concludes that, unless the pension plan is terminated, the debtor will be unable to pay all its debts pursuant to a plan of reorganizations and will be unable to continue in business outside the chapter 11 reorganization process. 29 U.S.C. ¤ 1341(c)(2)(B)(ii)(IV). The attached article discusses how the Falcon opinion is significant in four ways.


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