The PBGC today sought in court to terminate the Lehman Brothers Holdings Inc. Retirement Plan, which the agency estimates is 95% funded.
The Pension Benefit Guaranty Corp. estimates the plan has $898.2 million in assets to cover $940.8 million in liabilities. If the U.S. District Court in New York approves the termination, the PBGC expects to be responsible for $17.9 million of the $42.6 million shortfall.
The move comes ahead of a Dec. 22 bankruptcy hearing on the sale to senior management of most of the companys investment management business subsidiaries. In September, Barclays Capital acquired most of Lehmans capital markets and investment banking operations.
The agency is taking the pre-emptive action because none of the parties involved in the sale of Lehman Brothers assets, including Barclays, has taken responsibility for the retirement plan, said Jeffrey Speicher, PBGC spokesman. The agency plans to negotiate a deal with all firms that have a stake in Lehmans businesses so plan participants can have all of their promised benefits, Mr. Speicher said.