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Katy Industries Benefits Terminated

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The U. S. Bankruptcy Court approved Katy Industries’ motion for an order, pursuant to Section 1114 of the Bankruptcy Code, terminating retiree benefits.

As previously argued, “Historically, the Debtors offered certain of their employees the ability to participate in fully insured and self-funded retiree medical programs (the ‘Retiree Benefits’). As of the Petition Date, the Debtors’ average monthly contribution on account of the Retiree Benefits has been approximately $7,500. The Debtors have continued to provide the Retiree Benefits for many months after the Petition Date, while attempting to negotiate with the Retiree Committee a settlement related to the impending termination of the Retiree Benefits necessitated by the Debtors’ wind-down following the sale of substantially all of their assets under section 363 of the Bankruptcy Code (the ‘Sale’) to Jansan Acquisition.”

In addition, “The Sale to Jansan closed on July 21, 2017 (the ‘Closing’), and the Retiree Committee was appointed on or about July 31, 2017. On August 31, 2017, the Debtors made a settlement offer of $36,000 to the Retiree Committee in connection with the proposed termination of the Retiree Benefits, which amount represented approximately five months of the Debtors’ contributions for Retiree Benefits….In December 31, 2017, unbeknownst to the Debtors, certain Retiree Benefits administered by Jansan under the Assumed Plans expired and lapsed, resulting in a loss of benefits coverage to the Retirees. Because the Debtors did not administer Retiree Benefits provided under the Assumed Plans following the Sale, they were not provided an opportunity to renew, or receive notice of the pending expiration of, the Assumed Plans.”

Read more Katy Industries bankruptcy news.

The post Katy Industries Benefits Terminated appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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