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Katy Industries Bankruptcy Committee Sought

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Katy Industries filed with the U.S. Bankruptcy Court an expedited motion for an order authorizing the U.S. Trustee to appoint an official committee of retired employees to serve as the official representative for the Debtors’ retired employees. The motion explains, “There are currently 58 participants in the Retiree Medical Program, of which 48 are the Retirees and 10 are their dependents. Although the estimated total monthly amount associated with the Retiree Medical Program is relatively small under usual circumstances – approximately $17,000 for claims and $2,900 for medical administrative service fees payable to UMR, a division of United Healthcare – the Debtors are exposed to potentially high claims at any given time due to being self-insured.”

In addition, “There are approximately 23 retirees for whom the Debtors pay life insurance premiums. Currently, the estimated monthly amount associated with such liability is $2,100. Although the total net monthly cost to the Debtors for the Retiree Welfare Programs is approximately $15,000, the Debtors remain vulnerable and exposed to potentially high claims under the self-insured plan….Given the procedural posture of these chapter 11 cases, the impending sale of substantially all of the Debtors’ assets and the liability exposure discussed above, the Debtors have determined that it is necessary to, in an abundance of caution, begin the process to terminate the Retiree Welfare Programs. Following the sale of the assets, the Debtors will no longer have any employees and, therefore, there will be no benefit to continue to maintain any benefit plans in place.”

The Court scheduled a July 6, 2017 hearing to consider the retiree committee motion.

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The post Katy Industries Bankruptcy Committee Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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