Alpha Natural Resources filed with the U.S. Bankruptcy Court a motion for an order (a) authorizing termination of the Debtors’ (i) three nonqualified deferred compensation plans and (ii) two supplemental employee retirement plans (together, the “SERP Plans” and together with the deferred compensation plans, the “Plans”); (b) directing Bank of America as trustee to return to any Debtor that has contributed to a deferred compensation plan on behalf of its employees or directors, (c) rejecting trust agreements and (d) granting certain related relief.
The motion explains, “The Debtors’ proposed termination of the Plans satisfies both the horizontal and vertical/reasonable expectations tests and is thus authorized by section 363(c) of the Bankruptcy Code. With respect to the horizontal test, the modification and/or termination of supplemental benefit plans is a common practice for companies within various industries, including the coal industry.”
The motion continues, “Moreover, the Debtors have previously amended the Plans on several occasions in the ordinary course of their business, thus putting plan participants on further notice of the possibility of future modifications or termination. Termination of the Plans therefore satisfies the vertical, or reasonable expectations, test as well. Because the relief sought herein satisfies both the horizontal and vertical (or reasonable expectations) tests, the Debtors are authorized by section 363(c) of the Bankruptcy Code to terminate the Plans, without further notice and a hearing, because such actions are in the ordinary course of the Debtors’ business.”
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