Powermate committee inks $4.25 million pension settlement with PBGC

By Caroline Salls

Pittsburgh, May 21 - Powermate Corp.'s official committee of unsecured creditors requested court approval of a pension plan claim settlement reached with the Pension Benefit Guaranty Corp., according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Before Powermate's bankruptcy filing, the committee said the company was the contributing sponsor of the Powermate Consolidated Pension Plan, which has been frozen since 2004. As a result, the employees have not accrued any benefits since the plan was frozen.

According to the motion, although the company applied for a distress termination of the plan in 2008, the PBGC still has not granted the termination.

In addition, the committee said that the agency has filed $2.45 million in termination liability claims, $111,525 in minimum funding claims and an undetermined amount of unpaid premium claims. Powermate subsequently objected to the PBGC's claims.

Under the settlement, the PBGC will have a $4.2 million claim against Powermate, made up of a $1.7 million general unsecured claim and $700,000 in cash from an escrow account.

A hearing is scheduled for June 18.

Powermate, an Aurora, Ill.-based manufacturer of portable and standby electric generators, air compressors, air tools, pressure washers and accessories, filed for bankruptcy on March 17, 2008. Its Chapter 11 case number is 08-10498.

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