The PBGC took over two pension plans of St. Louis-based Falcon Products Inc., confirmed Gary Pastorius, a PBGC spokesman. In a settlement reached by the company and the PBGC in October, the agency agreed to take over two plans. The U.S. Bankruptcy Court in St. Louis in October authorized Falcon, which filed for Chapter 11 bankruptcy protection in January, to terminate its three pension plans, but the PBGC is appealing that decision in U.S. District Court in St. Louis. Pending that decision, Falcon agreed to continue administering a third, smaller plan.
The PBGC determined that Falcon and its subsidiaries "meet all criteria under federal law to transfer their pension liabilities to the pension insurance program," according to a statement issued by the agency.
The two plans for which the PBGC is now trustee have a total of $26 million in assets and $59 million in liabilities, according to PBGC estimates. The agency estimated it will be responsible for $31.6 million of the $33 million shortfall. Robert A. Greenfield, an attorney representing Falcon and a partner with the law firm Stutman Treister & Glatt, said the amount of the PBGC's claim in the Chapter 11 case remains subject to the bankruptcy court ruling. He noted that Falcon continues to make "normal required payments" to the third plan, which covers retirees of subsidiary Sellers & Josephson Inc. The PBGC estimates the Sellers & Josephson plan has $1.1 million in assets and $2.4 million in liabilities, Mr. Pastorius said. The PBGC estimates it would be responsible for about $1 million of the underfunding, he said.