Introduction

In Oneida Ltd. v. Pension Benefit Guaranty Corp. (In re Oneida Ltd.),1 the United States Bankruptcy Court for the Southern District of New York addressed whether a premium payment created by the Deficit Reduction Act of 2005 (“DRA”)2 for pension plans terminated as part of a chapter 11 restructuring is a pre-petition claim or a post-petition administrative expense. The Court held that the statutorily mandated premium payment was a contingent pre-petition claim and was discharged upon confirmation of the debtor’s plan.

Companies that terminate pension plans before filing for bankruptcy may no longer escape paying significant claims to the PBGC.

In Pension Benefit Guaranty Corporation v. Oneida, Ltd. dated April 8, 2009, the U.S. Court of Appeals for the Second Circuit reversed a ruling by the U.S. Bankruptcy Court for the Southern District of New York characterizing certain “termination premiums” owed to the Pension Benefit Guaranty Corporation (PBGC) pursuant to the Deficit Reduction Act of 2005 as contingent, pre-petition claims and thus dischargeable in bankruptcy.

On Thursday, AIG announced a $4.35 billion loss for the first quarter of 2009, as compared to a net loss of $7.81 billion in the first quarter of 2008 and a net loss of $61.7 billion in the fourth quarter of 2008.

Retiree benefits are often a central issue in bankruptcy cases. For many employers the high cost of retiree medical benefits has been a significant contributing factor to the Chapter 11 filing and a matter of ongoing concern if the debtor is to be able to successfully reorganize. Understandably, employees, retirees and unions are equally concerned about the status of retiree benefits. Their obvious interest is to attempt to prevent the erosion of benefits that had been expected to be available during retirement.

Late Sunday night, U.S. Bankruptcy Judge Arthur Gonzalez approved the sale of most of Chrysler's assets to Italian Automaker Fiat S.p.A., as contemplated in the Master Transaction Agreement between the two companies.

This afternoon, U.S. Supreme Court Justice Ruth Bader Ginsburg issued an order extending the temporary stay placed by a federal appeals court in New York last week on the sale of Chrysler LLC’s assets to a new company, to be partially owned by Italian automaker Fiat S.p.A., to allow opponents to the sale sufficient time to seek Supreme Court review.

Last week, our post “You Can’t Always Get What You Want” discussed a Texas bankruptcy court decision rejecting efforts by debtor Sam Wyly to claim as exempt a number of offshore private annuities.

On June 13, the Pension Benefit Guaranty Corporation ("PBGC") released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency's single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.

On June 13, the Pension Benefit Guaranty Corporation (“PBGC”) released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency’s single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.

The Australian unit trust industry recently experienced financial difficulties. The formal legal process of handling those difficulties has revealed gaps in the Australian regulatory map.

This article highlights some of those problems and the Government’s response to them.

Background