Kentucky Retirement Systems, Frankfort, plans to appeal a recent bankruptcy ruling that cleared the way for Seven Counties Services Inc. to leave the $15.5 billion retirement system, said William Thielen, executive director.
Mr. Thielen said in a telephone interview that the board voted to file a notice of appeal following a closed session Wednesday in which the ruling was discussed.
A federal bankruptcy judge ruled May 30 that Seven Counties Services, Louisville, is a non-governmental agency and eligible to file for Chapter 11 bankruptcy.
Seven Counties Services filed for Chapter 11 protection in April to “protect the services and interests of Seven Counties consumers by relieving the non-profit of the wholly unrealistic financial burden of the Kentucky Employees Retirement System,” according to a news release from the agency.
Seven Counties is a participant in KERS, which is administered by KRS.
The agency alleges that over the past eight years, its contribution rate to KERS has increased nearly 33%, according to the news release.
The ruling allows Seven Counties Services to “pursue a reorganization plan to protect the business operations, including discharging any past or future obligations to the Kentucky Retirement System,” according to the release.
The board has until 5 p.m. Fridayto file the notice of appeal, Mr. Thielen said.
Mr. Thielen said the board is pursuing an appeal for “a number of legal reasons and other reasons, including the solvency of this fund.”
Gwen Cooper, spokeswoman at Seven Counties Services, could not immediately provide a comment.
Last week, Fort Wright, Ky., filed a class-action lawsuit against the KRS board, alleging the board invested county employees' retirement money illegally in private equity and hedge funds. Mr. Thielen said KRS is still analyzing the lawsuit, which it discussed at Wednesday's closed session.
