Chrysler LLC, Auburn Hills, Mich., today asked U.S. Bankruptcy Court Judge Arthur J. Gonzalez to approve an agreement reached in April to have Daimler AG pay $600 million into Chryslers pension plan and guarantee another $200 million to the PBGC if necessary, said Jeffrey Speicher, spokesman for the PBGC, which is a party to the agreement.
The judge is conducting a hearing on the issue today, Mr. Speicher said, adding that he was unaware of any objections by Chryslers creditors to the agreement.
Mike Palese, Chrysler spokesman, said he had no information about any creditors objections.
Mr. Speicher couldnt say when Mr. Gonzalez would reach a decision.
The agreement between Chrysler, Daimler, the PBGC and Cerberus Capital Management was reached April 27, three days before Chrysler filed for Chapter 11 protection in U.S. Bankruptcy Court in New York.
Daimler paid $200 million when the agreement was reached and also agreed to pay $200 million to the plan in each of the next two years. In addition, Daimler would pay $200 million to the PBGC if the Chrysler plan is terminated and taken over by the agency before August 2012.
The agreement ended all other Daimler obligations to the Chrysler plan, waived repayment of all Daimlers outstanding loans to Chrysler and turned over Daimlers 19.9% share of Chrysler, giving Cerberus 100% ownership just before the bankruptcy filing.
The Chrysler plan was $9.3 billion unfunded as of Nov. 30, although the PBGC would assume responsibility for only $2 billion of that amount if the plan were terminated, Mr. Speicher said. The company had $21.6 billion in defined benefit assets as of Sept. 30, according to Pensions & Investments data.