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Hancock Fabrics Objection Filed

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Pension Benefit Guaranty Corporation (PBGC’S) filed with the U.S. Bankruptcy Court a limited objection to Hancock Fabrics’ agreement with PBGC terminating the pension plan and appointing PBGC as statutory trustee thereof.

The objection explains, “PBGC may initiate the termination of a Title IV covered pension plan if it determines that one or more of four statutory conditions exist with respect to a pension plan. One such condition is that the plan will be unable to pay benefits when due to plan participants and their beneficiaries. Following its established administrative procedures, PBGC determined that this statutory condition exists with respect to the Hancock Fabrics, Inc. Consolidated Retirement Plan (the ‘Pension Plan’ or the ‘Plan’). PBGC further determined that the Pension Plan should be terminated to protect the interests of participants, the plan termination date should be established as March 31, 2016, and PBGC should be appointed as trustee of the terminated Pension Plan. PBGC issued a notice of its determinations (the ‘Notice of Determination’ or the ‘NOD’) to the plan administrator of the Pension Plan, Hancock Fabrics, (‘Hancock’ or the ‘Company’).”

The objection continues, “The Motion, however, seeks to modify the PBGC Agreement, as set forth in the Proposed Order which the Debtors filed with the Motion. PBGC cannot and will not execute the modified agreement sought by Hancock. Among other things, the modification violates Title IV’s statutory provision granting the trustee of a terminated plan the power to require the transfer of all (or any part of) the plan’s records and assets to himself as trustee. As Hancock admits in the Motion, the PBGC and Hancock have not reached agreement on the terms of a consensual termination. Granting the Motion thus will not lead to a consensual termination of the Pension Plan under Title IV. Instead, absent the consent of both Hancock and PBGC, the only available means for terminating the Pension Plan under Title IV is for PBGC to seek a decree from the United States District Court.”

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The post Hancock Fabrics Objection Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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