The Pension Benefit Guaranty Corp. announced June 10 that it intends to take over the pension plan sponsored by Milacron Inc., which is continuing to operate while it reorganizes under Chapter 11 protection.
PBGC said it stepped in because the plan would have been abandoned after the sale of company assets as part of bankruptcy proceedings. The Milacron plan is about 45 percent funded, with assets of $260 million and liabilities of $573 million. PBGC said it expects to cover $285 million of the $313 million funding shortfall.
PBGC noted that Milacron retirees and beneficiaries will continue to receive their monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire.
Batavia, Ohio-based Milacron filed March 10 for Chapter 11, after facing a liquidity crisis at the end of February. The company cited the global economic downturn and credit crisis.
Milacron manufactures injection presses, blow molding machines, extruders, D-M-E mold components, structural foam machines and industrial fluids.
Milacron is in the process of restructuring, and has a definitive agreement to sell substantially all of its assets for about $175 million. That deal could be approved June 26 by U.S. Bankruptcy Court in Cincinnati.
Milacron's pension plan was frozen Dec. 31, 2007, and has about 8,400 participants. That figure includes current employees, retirees, and employees of its former machine tool business, now called MAG Cincinnati in Hebron, Ky.
The shortfall is the largest since 2006, when the agency took over a pension plan for Delta Air Lines Inc. pilots with about $920 million in unfunded liabilities.