The PBGC said that Falcon Products Inc., St. Louis, has not presented sufficient evidence that it cannot operate outside of bankruptcy protection without first terminating its three pension plans, according to court documents. In a Tuesday filing with the U.S. Bankruptcy Court in St. Louis, which is overseeing Falcon Products' Chapter 11 reorganization case, attorneys representing the PBGC noted the agency is "still reviewing the details" of the company's financial projections. Until Falcon Products officials "come forward with a fully developed business plan that is based on credible and complete financial projections and other financial information and otherwise demonstrate that their pension plans must be terminated, judicial resolution of the ‘reorganization in bankruptcy' distress test is premature," according to the PBGC filing.
The PBGC's filing said the agency would assume liability for more than $30 million in unfunded pension benefits if all the company's plans are terminated. The plans had a combined $28.6 million in assets as of November 2003, according to the company's most recent annual report.
Falcon Products, which received bankruptcy court approval on Sept. 23 to terminate one of its pension plans and replace it with a voluntary 401(k) plan, will seek court authorization to terminate its other two pension plans at an Oct. 6 hearing.