+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Recent efforts by Hostess Brands Inc. to use bankruptcy to discharge withdrawal liabilities totaling nearly $2 billion highlight a persistent and serious problem for multiemployer plans, a retirement industry official told BNA.
Employers such as snack food maker Hostess have tried using bankruptcy to avoid their withdrawal obligations, to the detriment of multiemployer plan participants, their beneficiaries, and the employers that continue to contribute to those plans, Randy G. DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans (NCCMP), said in a Nov. 20 interview.
NCCMP made that same argument in an amicus briefthat it submitted in February to the U.S. Bankruptcy Court for the Southern District of New York in the Chapter 11 bankruptcy case In re: Hostess Brands Inc. More recently, Hostess announced Nov. 16 that it had decided to seek bankruptcy court permission to shut down its operations and liquidate its business in the wake of a bakers' union strike, and that request was approved by a bankruptcy judge Nov. 21, the company said.
In the case of Hostess, the employer's withdrawal liabilities are “enormous,” and it should not be permitted “just to dump those on its competitors,” DeFrehn said.
Withdrawal liability refers to the statutory obligation of an employer that contributes to a multiemployer plan to pay off its share of benefit obligations before it withdraws from the plan. Hostess has withdrawal liabilities associated with 42 multiemployer plans, according to the Pension Benefit Guaranty Corporation.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).