Companies Shedding Pensions Abuse the Bankruptcy System According to Majority in Latest ABI Poll
COMPANIES SHEDDING PENSIONS ABUSE THE BANKRUPTCY SYSTEM, ACCORDING TO MAJORITY IN LATEST ABI POLL
June 22, 2006, Alexandria, Va. — Sixty-three percent of respondents to the recent American Bankruptcy Institute online poll agreed that the practice of corporate debtors to shed their defined benefit pension plans onto the Pension Benefit Guaranty Corp. (PBGC) is an abuse of the bankruptcy system. Of the majority of respondents, 52 percent “strongly agreed” and 11 percent “somewhat agreed” that corporate debtors transferring defined benefit pension plans onto the PBGC is an abuse of the bankruptcy system.
Conversely, 19 percent of respondents “disagreed strongly” and another 10 percent “disagreed somewhat” that the practice is an abuse of the bankruptcy system. Eight percent of the respondents did not know or had no opinion on the issue.
ABI membership and members of the public were welcome to submit their response to the statement: “The ability of corporate debtors to shed their defined benefit pension plans onto the PBGC is an abuse of the bankruptcy system.” More than 100 people participated in this latest ABI Quick Poll, which was open for voting from June 16 – June 22.
The poll question was based on reports that the PBGC is operating under a $22.8 billion deficit after assuming the liabilities of pension plans of recently bankrupt companies in the airline, automotive and steel industries. The move to terminate a pension is one of the most controversial practices in chapter 11 today.
The ABI Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.