The PBGC will take over the defined benefit pension funds of Furniture Brands International Inc., the agency announced Thursday.
The company and 18 affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on Sept. 9. On Oct. 3, private equity firm KPS Capital Partners announced an asset purchase agreement with Furniture Brands International for $280 million. A hearing to finalize the sale is scheduled for Friday.
KPS Capital Partners, which also agreed to provide $190 million in financing to support operations, is not taking on the pension fund.
The Pension Benefit Guaranty Corp. will take over the St. Louis-based furniture manufacturer's Furniture Brand Retirement Plan, which includes 30 legacy plans rolled into the company's plan over the years. The PBGC estimates that the plan is 55% funded, with $337 million in assets and $609 million in liabilities.
The PBGC, a member of the unsecured creditors committee, will assert claims for at least $272 million in the bankruptcy proceedings, PBGC spokesman Marc Hopkins said in an interview.