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The pension plan for bankrupt Collins & Aikman has $253 million in assets to pay more than $430 million in projected benefits.
Stephen Taub, CFO.com | US
April 17, 2007
In a court filing, Collins & Aikman disclosed that it has agreed to a $96 million settlement with the Pension Benefit Guaranty Corp., according to the Associated Press.
The auto-parts maker has been operating under Chapter 11 protection since May 2005. According to the AP, Collins & Aikman has missed $8.1 million in payments since it stopped making minimum contributions to its pension plan in July 2006. The wire service noted that the plan — which covers about 21,000 employees and retirees — has $253 million in assets to pay more than $430 million in projected benefits.
Collins & Aikman certainly has its hands full; a number of the company's former executives face legal trouble.
Last month, David Stockman — former president, chief executive officer, and chairman of Collins & Aikman, and a budget director under President Reagan — was charged with conspiracy, securities fraud, bank fraud, wire fraud, and obstruction of an agency proceeding.
The criminal indictment named three other former C&A executives: chief financial officer J. Michael Stepp, controller David R. Cosgrove; and director of purchasing Paul C. Barnaba. Federal prosecutors also recently filed criminal informations against four other ex-executives of the company: treasurer John G. Galante; Christopher M. Williams, executive vice president of the Business Development Group; Gerald E. Jones, chief operating officer and executive vice president of the Fabrics Division, and Thomas V. Gougherty, controller of the Plastics Division.
In addition, the Securities and Exchange Commission filed civil fraud charges against Stockman, the other seven individuals, former board member Elkin B. McCallum, and Collins & Aikman itself.
Attorneys for Stepp and Barnaba said their clients are innocent; attorneys for the other individuals either declined to comment or could not immediately be reached for comment.