The PBGC will take over the defined benefit plan of Reichhold Inc., the agency announced Friday.
The global resin manufacturer based in Durham, N.C., is selling U.S. assets in bankruptcy and terminating its pension plan as of Oct. 17.
The $228 million Reichhold Inc. Retirement Plan has $325 million in liabilities. Of the $97 million shortfall, the agency is expected to cover $90 million, officials of the Pension Benefit Guaranty Corp. said.
The company filed for Chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., on Sept. 30 to restructure its U.S. debts and arranged for $130 million in financing from Third Avenue Management, Black Diamond Capital Management, and J.P. Morgan Chase, which will also serve as the stalking-horse bidders for Reichhold's U.S. business. An auction and closing are scheduled for Dec. 19 and Jan. 30, 2015, subject to court approval.
In a statement, Reichhold said it asked for court approval to continue paying salaries and health benefits to employees during restructuring.
