The Pension Benefit Guaranty Corp. will take over two pension plans for SP Newsprint Co. LLC, Greenwich, Conn., as the company goes through Chapter 11 bankruptcy proceedings, the PBGC announced Tuesday.
According to bankruptcy court documents, a group of lenders is planning a “stalking horse” bid for the company. A hearing to approve that bid is set for Sept. 4. The new buyers are not assuming the SP Newsprint pension plans, according to a PBGC news release.
PBGC officials estimate the two pension plans — the SP Newsprint Co. Pension Plan and the SP Newsprint Co. Union Pension Plan — are 49% funded, with $74.4 million in assets and $150.7 million in liabilities. The PBGC will cover $73 million of the $76.3 million shortfall.
SP Newsprint and three affiliates filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Wilmington, Del., on Nov. 15, 2011. Calls to SP Newsprint, its legal counsel, financial advisers and claims agent GCG were not returned at press time.