Auto parts supplier Metavation LLC and its parent company, Revstone Industries, are fighting plans by the PBGC and other creditors to determine the companies’ fate in Chapter 11 bankruptcy proceedings.
In documents filed Sunday, the companies asked the U.S. Bankruptcy Court in Wilmington, Del., to reject the creditors’ restructuring plan.
Citing “highly aggressive litigation tactics” by the creditors, lawyers for the companies argued the unsecured creditors’ committee’s plan does not address pension liabilities that would hinder a reorganized Revstone, and fails to allow for payment of intercompany claims. A hearing on the jointly administered cases on the creditors’ reorganization plan and other matters is scheduled for Aug. 21.
The creditors are fighting Revstone’s plan to sell Metavation. In March, PBGC officials moved to take over Metavation’s two defined benefit plans before Revstone could sell the company. Based on information provided by Metavation to the Pension Benefit Guaranty Corp., the two Lexington, Ky.-based plans — Hillsdale Salaried Pension Plan and Hillsdale Hourly Pension Plan — have a total of $47 million in assets and $93 million in liabilities, for a funding ratio of 51%.
PBGC officials also filed liens against some Revstone affiliates not in bankruptcy to collect nearly $2 million in overdue pension contributions for the Hillsdale plans.
Calls to Revstone Industries, the PBGC and lawyers representing the company in the bankruptcy cases were not returned.
The Department of Labor, which filed lawsuits against Metavation last year and other Revstone subsidiaries in May to recover a combined $39 million in pension assets and to have Revstone Chairman George Hofmeister removed as plan fiduciary, objected to the company’s reorganization plan in documents filed with the bankruptcy court Monday.
