Huffy Corp., Miamisburg, Ohio, is asking the court overseeing its Chapter 11 bankruptcy protection case to approve terminating its pension plan, according to court papers. Attorneys representing the company filed the motion last week with the U.S. Bankruptcy Court in Dayton, Ohio. It said terminating the plan "is a vital component of (Huffy's) reorganization plans, not only saving a significant amount of cash but also allowing (Huffy) to attract the necessary sources of liquidity to fund the reorganization."
Current financial projections "show that Huffy cannot survive past the end of 2005," according to the motion. Attorneys asserted in the filing that Huffy, which filed for Chapter 11 protection in October, can't get added credit while it still has pension liabilities. A memorandum attached to the motion said the pension plan had about $72.2 million in assets and $135.4 million in liabilities, both as of Jan. 1. If the company cannot reorganize and is forced to liquidate, the plan will be terminated anyway, the motion said.
Gary Pastorius, a PBGC spokesman, said the agency will examine Huffy's request and determine whether it meets requirements for termination. Officials at the PBGC have not yet estimated how much in Huffy's plan liabilities the agency would take over, he said.
The bankruptcy court will consider the matter at a hearing Aug. 16. Objections are due July 25.