Powermate gets court OK of revised pension deal cutting PBGC claim

By Jennifer Lanning Drey

Portland, Ore., June 18 - Powermate Corp.'s official committee of unsecured creditors received court approval Thursday of a revised pension plan claim settlement with the Pension Benefit Guaranty Corp. that is broader than the originally inked agreement and more beneficial to unsecured creditors, according to an attorney.

Under the new global settlement, the PBGC will have a $3.1 million claim against Powermate, made up of a $1.0 million general unsecured claim and $2.1 million in cash from an escrow account.

Under the originally filed settlement agreement, the PBGC would have had 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.

According to the attorney, the changes to the settlement resulted from the addition of the Sun Powermate LLC entities to the agreement.

The new agreement was negotiated prior to a Thursday hearing in the U.S. Bankruptcy Court for the District of Delaware, which ended with the approval being granted.

As previously reported, before Powermate's bankruptcy filing, 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 original settlement 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 had 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.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.