Hostess’s pension liabilities

Overlawyered ^ | NOVEMBER 21, 2012 | WALTER OLSON

[ExxonPatrolUs]

Some of the company’s $2 billion in unfunded liabilities could get dumped on the federally sponsored Pension Benefit Guaranty Corporation (PBGC), raising premiums for the many solvent companies that are obliged to participate. Worse yet, a lot of Hostess’s liability is to union “multiemployer” plans, which under a peculiarly onerous federal law follow a “last-man-standing” rule of liability under which companies still operating are made to pick up the obligations of those no longer in business. David Kaplan at Fortune quotes a Credit Suisse report to the effect that multiemployer plans “are now underfunded by $369 billion.” [Ivan Osorio, CEI]

[E. Pluribus Unum]

Worse yet, a lot of Hostess’s liability is to union “multiemployer” plans, which under a peculiarly onerous federal law follow a “last-man-standing” rule of liability under which companies still operating are made to pick up the obligations of those no longer in business.

Mutually-assured destruction.

[skinkinthegrass]

*unbelievable*
...repeal this (d@mn) "law".
unionists, your really screwed..
and you did it to yourself.

[DManA]

Seems analogous to someone voluntarily quitting his job then expecting to get unemployment.

You’ve got assets, use them to pay your bills.

[V_TWIN]

Yep, it colapses, burdens other companies, they inturn stuggle to provide which drags them down or they even colapse. It looks like a domino effect.

[11th Commandment]

MAD for sure, but it also set the fate of other pension companies to file for bankruptcy.

I guess with the PBGC bailout, it is now apparent why employees went nuclear on Hostess. Sicking with Hostess meant cuts while they can go to another company and pick-up where they left off (in theory). That is why we hear odd comments from the Union workers about looking for other jobs in a slow economy and a troubled industry.

I can just see the interview now:

Employer: What qualifies you to be a baker?

Prospect: Well, I bankrupted my previous employer so you could start paying my pension

Employer: Ok, we will get back to you...

[tired&retired]

In one of my CPA continuing education programs on the construction industry, a labor attorney explained that he had a construction client who had two union employees and they decided to close operations.

The unfunded pension and welfare benefits for these two employees was several hundred thousand dollars. Worse part of it was that even if the owners declared bankruptcy, the current federal law required the owners to be liable for the unfunded union plans from their personal assets.

The unions have specialty attorneys that come in like ambulance chasers to extort all they can from employers closing operations.

[Uncle Chip]

Mutually-assured destruction.

You got that right. The upside down pyramid scheme.

[longtermmemmory]

I have even heard a few morons stating there is no judge in bankruptcy court only a trustee. news to all the nation’s bankruptcy judges.

Also in Chapter 11, the debtor in posession, IS the trustee.

This is a chapter 7 and thus has a court appointed trustee.

This makes me thing the owners as “going galt”.