Pabst Brewing Co. may have a long legal battle over whether it withdrew from a Milwaukee brewery multiemployer pension plan and has to pay withdrawal liability.
"I think this thing will be subject to a lot of litigation and the battles will go on," said Gary Lewitzke, corporate director-industrial relations, in Pabst's San Antonio, Texas, office. He said the company, which is owned by S&P Corp., Mill Valley, Calif., plans to dispute trustees' claims that the company withdrew from the plan.
Trustees for the Milwaukee Brewery Workers Pension Plan have asked Pabst to pay about $39 million in withdrawal liability, which is about half of the fund's $150 million unfunded liabilities, according to attorney Jeffrey R. Fuller. His Milwaukee law firm of Reinhart Boerner Van Deuren Norris is legal counsel to the plan.
The plan has $60 million to $74 million in assets; different officials gave different amounts. All of the assets are managed by INVESCO Capital Management Inc., Atlanta, the officials said.
The plan has two remaining active employers contributing to it - Pabst and Miller Brewing Co., a Milwaukee-based a unit of Philip Morris Cos., New York. Its trustees consist of representatives from the two companies and the Brewery Workers Union.
A Miller financial executive, who didn't want to be named, said the company supports the action against Pabst. Mr. Lewitzke said that for 1996, Pabst contributed $2.6 million to the plan, while Miller contributed $5.4 million.
The Miller executive confirmed approximately the same numbers.
Charles Hoffman, a trustee of the plan and financial secretary of Brewery Workers Local 9, said trustees contend Pabst withdrew from the plan when it closed its Milwaukee brewery.
Mr. Lewitzke said Pabst "temporarily closed" its Milwaukee brewery and laid off the plant's 80 employees in December 1996, shifting its production to a G. Heileman Brewing Co. brewery in LaCrosse, Wis., which is owned by Stroh Brewing Co., Detroit. He said Pabst would decide by the end of 1998 whether to reopen the Milwaukee brewery.
Mr. Lewitzke said Pabst hasn't yet responded to the trustees' demand for payment of the withdrawal liability, although it plans to do so and dispute it. Pabst plans to pay a very small amount to the plan based on employees working to clean the Milwaukee plant, but declined to say how much.