"This is the accessible text file for GAO report number GAO-07-1101 entitled 'Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy' which was released on September 6, 2007. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Report to Congressional Requesters: United States Government Accountability Office: GAO: September 2007: Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy: GAO-07-1101: GAO Highlights: Highlights of GAO-07-1101, a report to congressional requesters. Why GAO Did This Study: In recent years, considerable debate has centered on companies using the chapter 11 bankruptcy reorganization process to reduce or eliminate employer-sponsored benefits in an effort to become more competitive. Congress recently enacted several laws, in part, to help address this issue. Most notably, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) and the Pension Protection Act of 2006 (PPA). BAPCPA contained provisions related to chapter 11 business bankruptcies and sought to address the treatment of benefits during the bankruptcy process. In addition, the PPA amended several Employee Retirement Income Security Act of 1974 (ERISA) provisions related to defined benefit (DB) plans in bankruptcy. This report addresses (1) how, if at all, recent legislative changes affected the treatment of pension and health benefits during chapter 11 bankruptcies, and (2) what is known about the extent to which businesses have modified employee or retiree pension and health benefits. GAO reviewed filings of 115 public companies that filed for bankruptcy between October 17, 2004 and October 17, 2006, and conducted interviews with various experts on the treatment of benefits in the bankruptcy process. Relevant federal agencies agreed with the findings contained in this report. What GAO Found: The effects of recent legislation, including BAPCPA and PPA, on employers’ decisions to modify benefits are difficult to distinguish from the effects of other factors that lead to changes in benefits both within and outside of the bankruptcy process. Most bankruptcy professionals agreed that while BAPCPA included some changes that will affect the treatment of employer-sponsored benefits—such as the look- back period for the reinstatement of retiree health benefits—it will not substantially affect employers’ decisions to modify benefits. Some bankruptcy professionals suggested that PPA may affect employers’ decisions to maintain their defined benefit (DB) plans. Bankrupt employers consider many other factors when trying to reorganize successfully, including competing claims, their stakeholders and creditors, and outside forces such as the financial market and industry competition. More information is known about the extent to which selected employers made benefit changes resulting in court decisions—i.e., changes to DB plans, retiree health benefits, and benefits covered by a collective bargaining agreement (CBA)—than changes not resulting in them—i.e., changes to defined contribution (DC) plans and active employee health benefits not covered by a CBA. Most of the 115 employers we reviewed did not offer benefits that specifically needed court approval to change. We found only 20 of these employers had DB plans, 18 had retiree health benefits, and 28 had employees covered by a CBA. Nine employers terminated at least one of their DB plans, and 3 have terminations pending; 5 sought to modify their retiree health benefits; and 8 sought to modify or reject CBAs. While most employers received approval to continue employee benefits in their initial motions, it is unknown how many employers that offered health benefits to active employees or DC plans continued to fund them because employers do not always need to seek court approval to change these benefits. [hyperlink, www.gao.gov/cgi-bin/getrpt?GAO-07-1101]. To view the full product, including the scope and methodology, click on the link above. For more information, contact Barbara Bovbjerg at (202) 512-7215 or bovbjergb@gao.gov. [End of Section] Contents: Letter: Summary of Findings: Concluding Observations: Agency Comments and Our Evaluation: Appendix I: Briefing Slides: Appendix I: Select Information on Bankruptcy Cases Reviewed: Appendix III: Comments from the Pension Benefit Guaranty Corporation: Appendix IV: GAO Contacts and Staff Acknowledgments: Abbreviations: AOUSC: Administrative Office of the United States Courts: BAPCPA: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005: CBA: collective bargaining agreement: DB: defined benefit: DC: defined contribution: EBSA: Employee Benefits Security Administration: ERISA: Employee Retirement Income Security Act of 1974: PACER: Public Access to Court Electronic Records: PBGC: Pension Benefit Guaranty Corporation: PPA: Pension Protection Act of 2006: SEC: Securities and Exchange Commission: United States Government Accountability Office: Washington, DC 20548: September 6, 2007: Congressional Requesters: Each year, thousands of employers file for chapter 11 bankruptcy to reorganize their finances in an attempt to become profitable[Footnote 1]. This process can often be contentious, as many stakeholders, including creditors, and employee and retiree groups, may be competing for diminishing portions of the employers' remaining assets. In recent years, considerable debate has centered on the use of the chapter 11 bankruptcy process by employers to reduce or eliminate benefit obligations in an effort to become more competitive, and whether such benefit obligations have disproportionately affected employers in certain industries. For example, structural problems in industries such as airlines, steel, and automotive parts manufacturing have led large employers to declare bankruptcy and terminate their defined benefit (DB) plans[Footnote 2]. These recent high-profile bankruptcy reorganizations have frequently resulted in significant reductions of jobs and employee benefits--including wages, retirement, and health benefits--and resulted in the Pension Benefit Guaranty Corporation (PBGC) assuming billions of dollars in underfunded pension benefit obligations. In recent years, Congress enacted several laws to, in part, help address some of these issues. Most notably, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) and the Pension Protection Act of 2006 (PPA). BAPCPA sought to reduce the number of perceived abuses in consumer and corporate bankruptcy filings. Although BAPCPA mainly focused on consumer bankruptcies, it contained certain provisions related to chapter 11 business bankruptcies and sought to address the ways in which employer- sponsored benefits are treated during the bankruptcy process. For example, BAPCPA established a "look-back" period allowing courts to reinstate retiree health benefits to what they were before any modification by the employer during the 180 days prior to filing for bankruptcy. Among other things, PPA amended the Employee Retirement Income Security Act of 1974 (ERISA), including several provisions related to the termination and funding of DB plans in bankruptcy. In response to your interest in the effects of business bankruptcies on employee and retiree pension and health benefits, this report addresses (1) how, if at all, recent legislative changes have affected how businesses may treat pension and health benefits during chapter 11 bankruptcies, and (2) what is known about the extent to which businesses have modified employee or retiree pension or health benefits in chapter 11 bankruptcies before and after changes in the bankruptcy law took effect. To address these questions, we focused on the 115 public employers[Footnote 3] identified by the Securities and Exchange Commission (SEC) that filed for chapter 11 bankruptcy the year prior to and the year following BAPCPA's general enactment date--October 17, 2005. Therefore, our analysis covers bankruptcy cases filed between October 17, 2004, and October 17, 2006. To identify key changes to the U. S. Bankruptcy Code and ERISA, we reviewed BAPCPA and PPA as well as other laws that affected the treatment of benefits. We interviewed bankruptcy professionals, including researchers, federal bankruptcy judges, and attorneys, to gain their insights on these changes and the potential effects they may have on benefits. The attorneys we interviewed have represented various stakeholders in the chapter 11 process including unions, retiree committees, debtor employers, and creditors. We also interviewed officials that represented the government and the public at the PBGC, Administrative Office of the United States Courts (AOUSC), Department of Justice's U.S. Trustee Program, Department of Labor's Employee Benefits Security Administration (EBSA), and Department of the Treasury to obtain their insights on how recent legislative changes could affect the treatment of benefits in bankruptcy. Additionally, we interviewed officials at SEC to gain an understanding of public companies' SEC filings. We reviewed documents submitted in connection with court motions to change certain benefits (including DB plans, retiree health benefits[Footnote 4], and benefits covered by collective bargaining agreements (CBA)), first day orders, and motions to continue employee benefits. We obtained and reviewed these publicly available documents from the Public Access to Court Electronic Records system (PACER). We also reviewed company information from annual SEC filings to identify employers' various benefit obligations. To provide contextual information, we obtained and analyzed data from AOUSC on all chapter 11 cases filed over the period. We found these data to be sufficiently reliable for our purposes. The newness of BAPCPA and PPA and the small number of changes they contain affecting how employers can treat benefits, as well as the limited information readily available on benefit changes proposed and approved, made it difficult to assess the effects of these laws. We conducted our work between October 2006 and September 2007 in accordance with generally accepted government auditing standards. On August 23, 2007 and August 28, 2007, we briefed your staff on the results of our work using the briefing slides we include in appendix I. The report formally conveys the information provided during our briefings. Summary of Findings: In summary, the effects of recent legislation on employers' decisions to modify benefits are difficult to distinguish from the effects of other factors--both within and outside of the bankruptcy process. Several laws may affect the way employers treat employee and retiree benefit plans in bankruptcy, including the Bankruptcy Code and ERISA. BAPCPA and PPA--which amended the Bankruptcy Code and ERISA, respectively--included some provisions related to the ways that employers can treat benefits in the bankruptcy process. While BAPCPA included some changes that will affect the treatment of employer- sponsored benefits in bankruptcy--such as the possible reinstatement of retiree health benefits to what they were before any modification by the employer during the 180 days prior to filing for bankruptcy--most professionals agreed that the act will not substantially affect employers' decisions to change benefits. Some bankruptcy professionals said that PPA may impact employers' treatment of benefits in bankruptcy and, in particular, how employers may seek to modify DB pension plans. For example, some bankruptcy professionals said that the additional time given to airlines to fund their DB plans contributed to at least two major airlines retaining some or all of their plans in bankruptcy; other professionals, however, said this change may not fully protect these DB plans in the long-term. Further, the National Labor Relations Act[Footnote 5] outlines how most employers can treat benefits covered by collective bargaining agreements, and the Railway Labor Act[Footnote 6] can affect the treatment of benefits affecting airline and railroad employees. Bankrupt employers may also consider other factors when trying to successfully reorganize. For example, competing claims in bankruptcy, stakeholders and creditors, and other outside forces such as the financial market and industry competition, may contribute to employers' decisions to modify their employee benefit plans. More information is known about the extent to which employers made benefit changes that involved specific court approval--such as the termination of DB plans, or changes to retiree health benefits or benefits covered by CBAs--than those that can usually be made without specific court involvement or approval--such as changes to DC plans or benefits for active employees not covered by CBAs. Most of the 115 employers we reviewed did not offer benefits that specifically needed court approval to change. Specifically, we found that 20 of these employers offered DB plans, 18 offered retiree health benefits, and 28 offered at least some employees benefits covered by a CBA[Footnote 7] Fewer than half of the employers with these types of benefits sought to modify them in bankruptcy. For example, in the year prior to and the year after the enactment of BAPCPA, nine employers terminated their DB plans, resulting in a $1.4 billion liability to PBGC. An additional three employers had terminations pending. Five employers sought approval to modify their retiree health benefits. The presence of a CBA adds another layer of complexity to how employers may treat benefits in bankruptcy. Generally, employers and unions negotiate any changes to a CBA--changes that often include benefit and wage cuts--outside the courts. Eight of the employers that reported having at least some employees with union representation sought to modify or reject at least one of their collective bargaining agreements. While most employers received approval to continue employee benefit plans in their first day orders, it is unknown how many employers that offered health benefits to active employees or defined contribution plans continued to fund them. In particular, employers do not need court approval to change these benefits if they are outside of a contractual agreement, although some employers may still seek such approval. Some bankruptcy professionals said that employers may stop making matching contributions to these plans or may not remit payments in a timely manner. However, experts stated that this information is often difficult to track. Concluding Observations: Employers continue to play a primary role in financing retirement income and health benefits for many workers. However, many are finding it challenging to provide these benefits in an increasingly competitive environment. Modifying benefit offerings as a cost-cutting measure is not unique to bankruptcy, and is a trend that is also occurring outside the bankruptcy process. In addition, changes in benefits, such as the shift from defined benefit to defined contribution plans, means that fewer employers may file motions to modify benefits in the future because these changes typically do not involve specific court approval. While additional time may be needed to more fully understand how recent legislation has affected employers' treatment of benefits in specific cases, the full impact of both of these laws on individuals' benefits or related federal programs may never be known because employers' decisions to modify benefits are part of a complex process, of which bankruptcy and pension laws are only a part. Many stakeholders are involved in the decision to modify benefits, and striking a balance between maintaining employee benefits and successful reorganization can be difficult for all parties involved. Achieving this balance will often require successful negotiations between various stakeholders such as unions, creditors, debtors, and in some cases PBGC. Few employers have sought to modify their benefit plans in bankruptcy. However, when such modifications are made, the effect on employees, retirees, and related federal programs may be substantial. Agency Comments and Our Evaluation: We obtained technical comments on a draft of the briefing slides from cognizant agency officials, which we incorporated where appropriate prior to briefing your staff. After the briefing, we provided a draft of the entire report to officials of the Department of Labor, PBGC, Department of Justice, and the AOUSC. We received technical comments from PBGC and EBSA, which we have incorporated where appropriate. The Interim Director of the Pension Benefit Guaranty Corporation provided written comments on a draft of this report in a September 4, 2007 letter. PBGC agreed with our findings and highlighted that PBGC will continue to monitor the effects of both the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and the Pension Protection Act of 2006 on PBGC's insurance programs. The Department of Justice and AOUSC did not provide comments. We plan to provide copies of this report to the Secretaries of Labor, Justice, and the Treasury. We will also send copies to EBSA, the Department of Justice's U.S. Trustee Program, AOUSC, PBGC, and interested congressional offices. We will make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512- 7215 or bovbjergb@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Signed by: Barbara D. Bovbjerg: Director, Education, Workforce, and Income Security Issues: Congressional Requesters: The Honorable Patrick J. Leahy: Chairman: Committee on the Judiciary: United States Senate: The Honorable Richard J. Durbin: The Honorable Russell D. Feingold: The Honorable Edward M. Kennedy: United States Senate: The Honorable John Conyers, Jr.: Chairman: Committee on the Judiciary: House of Representatives: The Honorable Howard L. Berman: The Honorable William D. Delahunt: The Honorable Sheila Jackson-Lee: The Honorable Zoe Lofgren: The Honorable Jerrold Nadler: The Honorable Robert C. Scott: The Honorable Chris Van Hollen, Jr.: The Honorable Debbie Wasserman Schultz: The Honorable Melvin L. Watt: House of Representatives: [End of section] Appendix I Briefing Slides: Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy: Briefing for Senate and House Committees on the Judiciary: August 2007: Introduction: * In recent years, considerable debate has centered on the use of the chapter 11 bankruptcy process by employers to reduce or eliminate employer-sponsored benefit obligations. * In part, because of these concerns, Congress passed legislation that included provisions affecting how employers may treat benefits in chapter 11 bankruptcy: - The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) amended the Bankruptcy Code. - The Pension Protection Act of 2006 (PPA) amended the Employee Retirement Income Security Act of 1974 (ERISA). Key Questions: * How, if at all, have recent legislative changes affected the treatment of pension and health benefits during chapter 11 bankruptcies? * What is known about the extent to which businesses have modified employee or retiree pension and health benefits in chapter 11 bankruptcies before and after changes in the bankruptcy law took effect? Scope and Methodology: To answer these questions, we: * Reviewed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and other laws, including the Pension Protection Act of 2006, to identify how they affect the way that businesses may treat benefits in bankruptcy. * Reviewed publicly available court documents of the 115 public companies identified by the Securities and Exchange Commission (SEC) as having filed for chapter 11 bankruptcy in the years before and after BAPCPA’s general enactment date—October 17, 2005, (76 companies before, 39 after), including motions to change benefits, such as defined benefit (DB) plans, retiree health benefits, and those protected by collective bargaining agreements (CBA). We also reviewed whether employers sought approval to continue benefit programs. The scope of analysis was limited to public companies due to data limitations and is not generalizable to all companies in bankruptcy. * Interviewed selected bankruptcy professionals, including researchers, judges, and attorneys who have represented various stakeholders including unions, retiree committees, debtor employers, and creditors, as well as officials who have represented the government and the public at the Pension Benefit Guaranty Corporation (PBGC), Administrative Office of the United States Courts, Department of Justice’s U.S. Trustee Program, Department of Labor’s Employee Benefits Security Administration (EBSA), Department of the Treasury, and SEC. * Our work was performed between October 2006 and July 2007 in accordance with generally accepted government auditing standards. Summary of Findings: * The effects of recent legislation, including BAPCPA and PPA, on employers’ decisions to modify benefits are difficult to distinguish from the effects of other factors that lead to changes in benefits both within the bankruptcy process and outside of the bankruptcy process such as competitive pressures in certain industries. * More is known about benefit changes subject to court approval—such as the termination of DB plans, and changes to retiree health benefits[Footnote 8] or benefits covered by collective bargaining agreements—than about other types of benefits such as defined contribution plans: - Nearly one-half of the employers we reviewed with DB plans terminated them in bankruptcy. - About 28 percent of employers we reviewed with retiree health obligations sought to modify these benefits. - About 29 percent of employers we reviewed with collective bargaining agreements sought to reject these agreements. Background: Examples of Employer-Sponsored Benefits: * Employers generally can sponsor two types of pension plans: - Defined benefit (DB) plans provide a pension benefit that is typically expressed as a monthly benefit based on a formula that generally combines salary and years of service to the company. - Defined contribution (DC) plans, which include 401(k) plans, base retirement benefits on employee and/or employer contributions to and investment returns on individual accounts; participants may be able to direct the investment of the assets in their individual accounts. * Employers may sponsor several types of health benefits, and the amounts they contribute can vary. * Benefits may be offered as part of a collective bargaining agreement (CBA)—a written agreement or contract between an employer and a union or professional or trade association. Typically, labor and management negotiate the terms of employment, which include salaries, work rules, and health and pension benefits. Background: Treatment of Benefits under the Bankruptcy Code and the Employee Retirement Income Security Act of 1974 (ERISA): Bankruptcy Code: Generally, employers will file for bankruptcy protection either under chapter 7 (liquidation) or chapter 11 (reorganization). Chapter 11 provides an opportunity for a debtor to reorganize its financial obligations during which time the debtor may continue to conduct its business. BAPCPA amended the Bankruptcy Code. Many of the changes focused on consumer bankruptcies, but it also contained provisions related to chapter 11. ERISA: Pension: Sets certain standards for most voluntarily-established employer- sponsored pension benefit plans in the private sector. Generally, employers may seek to terminate a pension plan, in the absence of a contractual agreement prohibiting it, if they meet certain requirements. Employers may not decrease participants’ DB benefits or increase benefits during bankruptcy if the plan is underfunded. PPA amended several ERISA provisions related to DB plan funding and termination, among other things. Health: While ERISA generally governs employee health benefit plans, these plans are subject to less extensive requirements than pension plans. Pension assets that have been deposited into the trust are not part of the debtor's estate. Bankruptcy Code: BAPCPA specified that the definition of "property of the estate" excludes employee contributions to benefit plans, protecting contributions that were withheld but not yet deposited into the trust ERISA: Contributions made to a pension plan must be maintained for the exclusive benefit of participants and their beneficiaries. * DB plans are typically insured by PBGC. An employer’s DB plan can be terminated in one of three ways: - Standard termination—the employer wants to end its DB plan and the plan has sufficient funds to pay all benefits owed to participants. - Distress termination—the employer is in financial distress and must prove it cannot remain in business unless the plan is terminated. - Involuntary termination—PBGC can end the plan if it determines that the termination is needed to protect the interests of plan participants or the PBGC insurance program. Defined contribution plans, e.g., 401(k) plans, are held in trust and not insured by PBGC. Bankruptcy Code: To modify or terminate retiree health benefits, the debtor must be able to show that: * It negotiated in good faith with authorized representatives of the retirees. * The retirees’ authorized representative refused the proposal without good cause. * The modification is necessary to permit the reorganization, assures that all parties are treated equitably, and is clearly favored by the balance of the equities. BAPCPA amended the law to allow the court to reinstate retiree health benefits that were modified within 180 days prior to filing for bankruptcy. ERISA: Generally, employers can reserve the right to modify or terminate employee health benefit plans[Footnote 9]. Employers must provide employees with a minimum of 60 days advanced notice of its intent to terminate a plan. Background (cont.) Treatment of Benefits Covered by a Collective Bargaining Agreement: Bankruptcy Code: To terminate or change a CBA, the debtor must be able to show that: * Prior to filing the motion, the debtor made a proposal based on the most complete and reliable information and that the proposal treats all affected parties fairly and equitably. * The employees’ authorized representative refused the proposal without good cause. * The balance of the equities clearly favors rejection[Footnote 10]. ERISA: National Labor Relations Act[Footnote 11] and ERISA: A CBA may require that an employer establish or maintain pension and health benefits for employees and/or retirees. These agreements generally cannot be changed without negotiations and agreement by both parties. PBGC may, however, terminate a DB plan (involuntary termination) or undo a termination— restoring the plan to the employer as the trustee—regardless of whether the plan is part of a CBA. Background (cont.) Other Key Changes in BAPCPA: * Increased the amount of wages and benefits allowed as a priority claim (those paid before other unsecured claims) from $4,925 per covered employee earned within 90 days of the bankruptcy to $10,000 earned within 180 days prior to bankruptcy. * Limited the amount of and approval procedures for key employee retention plans (KERP), including limiting certain retention or severance payments to executives to, for example, 10 times the average amount of similar payments to nonmanagement employees. * Shortened the possible exclusivity period—where debtors have the exclusive right to file a reorganization plan—limiting the maximum exclusivity period to 18 months. Background (cont.) Other Key Changes to ERISA: PPA amended ERISA and included several provisions specifically related to the treatment of pension plans in bankruptcy, including: * Made permanent the $1,250 per participant premium, added by the Deficit Reduction Act of 2005, that an employer is required to pay to PBGC if its DB plan is terminated during chapter 11 bankruptcy. These employers are to pay this premium for 3 years after they emerge from bankruptcy. * For terminated DB plans, PPA changed the date used to calculate the pension guarantee from the plan termination date to the bankruptcy petition filing date. * In response to financial weakness of the commercial airline industry, allowed an alternative funding schedule for airlines’ DB plans. Airlines may amortize their unfunded liabilities over 17 years if benefit accruals are frozen or 10 years if benefit accruals are not frozen. * Taxed benefits set aside to prefund certain deferred compensation plans for top executives—known as nonqualified plans—if, among other things, the employer is in bankruptcy. Background (cont.) Role of Federal Agencies: * The Department of Justice’s U.S. Trustee Program: - Oversees the administration of bankruptcy cases and private trustees. * The Department of Labor’s Employee Benefits Security Administration: - Administers and enforces the fiduciary, reporting, disclosure, and other provisions of ERISA. * Administrative Office of the United States Courts: - Among other things, provides a wide range of administrative, legal, financial, management, program, and information technology services to the federal courts. * Pension Benefit Guaranty Corporation: - Insures certain DB pension plans and becomes statutory trustee of terminated plans when an employer has insufficient assets to pay the benefits that participants are owed. Background (cont.) Information on All Chapter 11 Bankruptcies Filed: Figure 1: Chapter 11 Bankruptcy Filings in the Year Before and the Year After BAPCPA’s Effective Date (October 17, 2005) [See PDF for image] This is a bar graph containing two lines and two bars, with each line indicating the number of cases filed[Footnote 12]. Line one indicates the number of cases filed one year after BAPCPA (approximately 4740). Line two indicates the number of cases filed one year before BAPCPA (approximately 6200). Source: GAO Analysis of AOUSC data. [End of Figure] Effects of Recent Legislation: The Effects of Recent Legislation on Employers’ Decisions to Modify Benefits Are Difficult to Distinguish from Those of Other Factors * Bankruptcy professionals generally agreed that BAPCPA will have a limited effect on employers’ decisions to modify benefits. * Changes included in the PPA, such as the change in termination date and to funding rules, may affect employers’ decisions to maintain their DB plans. * Several other factors such as market conditions and benefit obligations can also influence employers’ decisions in bankruptcy. Many Factors Affect Employers’ Benefit Decisions: Figure 2: Factors That May Affect Employers’ Decisions Regarding Benefits: [See PDF for image] Source: GAO [End of figure] BAPCPA Had Few Provisions Affecting Treatment of Benefits: Bankruptcy professionals identified two changes directly affecting benefits in chapter 11. * Possible reinstatement of retiree health benefits modified within 180 days prior to filing for bankruptcy:Some professionals stated this was a positive change; others stated that it addressed a nonexistent problem. Bankruptcy professionals said that they were not aware of any cases filed since BAPCPA involving such retiree benefit changes * Increase in the amount of employee wages and benefits considered priority payments: While this change increased the potential amount of funds available to pay wages and benefits, professionals varied in their opinions of how this change would affect benefits. Some stated it may not be enough and would all be used on wages; others stated most participants would not reach the $10,000 limit, with the exception of highly paid employees. Bankruptcy professionals identified some provisions not directly related to benefits that might affect how employers treat benefits and the amount of benefits that employees receive. * Lease assumptions and utility payments: The tightening of the time for assuming leases and enhanced protection for utility payments could contribute to employers seeking savings elsewhere (including by modifying benefits). * Key employee retention plans: Several professionals said that the restrictions on KERPs—which were meant, in part, to curb employers from awarding large executive bonuses while cutting employees’ benefits—may not be effective. For example, employers can try to circumvent the provision by proposing incentive plans rather than retention plans[Footnote 13]. Others felt that the restrictions were too stringent and could hinder successful reorganization. * Exclusivity period: Shortening the time for filing a reorganization plan decreases the amount of time employers have to negotiate and make decisions, which could cause some employers to cut benefits without exploring alternatives. Employers are just now reaching the 18-month exclusivity limit, so the effect of the change is unknown. PPA Had Some Provisions That May Affect the Treatment of DB Plans in Bankruptcy: * Termination premium: While this premium may provide additional revenue to PBGC, some professionals stated the cost could cause more employers to liquidate their assets instead of reorganizing—generally eliminating any employee benefit obligations. * Termination date: Some professionals stated that this could reduce an individual’s benefit because of the decrease in time used to calculate the guaranteed benefits. The change may also reduce an employer’s incentive to delay plan termination. For example, PBGC officials said that prior to PPA, employers could have delayed plan termination, increasing the amount for which PBGC was liable. * Airline “stretch-out”: Some professionals stated this contributed to Delta Air Lines maintaining plans for its ground employees and Northwest Airlines maintaining its employee plans throughout the bankruptcy process. However, it is unknown whether either will be able to fund its plans by the end of the stretch-out period. Professionals Cited Other Factors That May Influence Employers’ Treatment of Benefits: * Competing pressures between maintaining benefits and long-term stability after reorganization. * Employers with high employee benefit costs and in specific industries—such as airlines or automotive manufacturing—may find it difficult to compete given the potential cost of these obligations[Footnote 14]. * Lenders may affect employers’ treatment of benefits. For example, in at least one case, the lender would only provide financing if the DB plan were terminated. In another instance, an employer was able to retain its DB plan because it received additional financing. * The composition and actions of the creditors or creditors’ committee may affect employers’ treatment of benefits. * The cost and risk factors of providing benefits also influence employers’ decisions to modify these benefits outside the bankruptcy process[Footnote 15]. Extent of Benefit Modifications: More Is Known about Benefit Changes Subject to Court Approval: * More is known about the extent to which employers make benefit changes subject to court approval, including changes to: - DB pensions, - retiree health benefits, and - benefits covered by a CBA. More is Known about Benefit Changes Subject to Court Approval: DB Plans: * Employers may consider terminating DB plans in bankruptcy because they are a large liability. However, while DB plan obligations topped several billion dollars for some employers, not all of them terminated their plans. * Several employers froze their DB plans prior to filing for bankruptcy. * In the year prior to and after BAPCPA, 20 of the 115 employers offered at least one DB plan: - 9 of these terminated their plans in bankruptcy (4 post-BAPCPA cases); - 3 of these have terminations pending (2 post-BAPCPA cases); and - 8 of these emerged or are planning to emerge with their plans intact (2 post-BAPCPA cases). The employers that terminated pension plans during bankruptcy resulted in an estimated $1.4 billion liability to PBGC, as shown below. Table 1: Liability of DB Pension Terminations and Number Affected, as of Plan Termination Date: Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Amcast Industrial Corporation; Pension plan termination finalized date: 07/01/05; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 83.0; Number of employees and retirees affected: 6,200; Funded percentage (assets/benefits/liabilities): 53%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Collins & Aikman Corporation; Pension plan termination finalized date: 03/29/07; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 161.0; Number of employees and retirees affected: 21,000; Funded percentage (assets/benefits/liabilities): 42%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Delta Airlines Incorporated [a]; Pension plan termination finalized date: 09/02/06; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 944.6; Number of employees and retirees affected: 13,294; Funded percentage (assets/benefits/liabilities): 35%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Commerical Furniture Group (Falcon Products)[b]; Pension plan termination finalized date: 08/31/05; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 31.8; Number of employees and retirees affected: 2,432; Funded percentage (assets/benefits/liabilities): 48%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Huffy Corporation; Pension plan termination finalized date: 01/14/05; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 80.0; Number of employees and retirees affected: 3,700; Funded percentage (assets/benefits/liabilities): 53%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Oneida LTD; Pension plan termination finalized date: 05/01/06; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 48.3; Number of employees and retirees affected: 1,900; Funded percentage (assets/benefits/liabilities): 69%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Tom's Food Incorporated; Pension plan termination finalized date: 12//06; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 42.5; Number of employees and retirees affected: 3,000; Funded percentage (assets/benefits/liabilities): 49%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Tropical Sportswear Int'l. Corporation; Pension plan termination finalized date: 08/18/05; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 5.4; Number of employees and retirees affected: 977; Funded percentage (assets/benefits/liabilities): 55%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: USA Commerical Mortgage; Pension plan termination finalized date: 01/12/07; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 0.6; Number of employees and retirees affected: 30; Funded percentage (assets/benefits/liabilities): 56%. Plan sponsors filing for bankruptcy between October 17, 2004, and October 17, 2006: Total; Unfunded guaranteed benefit liability (UGL)(dollars in millions): 1,397.2; Number of employees and retirees affected: 52,533. [a] The termination of Delta's pilots plan represents the sixth largest claim in PBGS's history. [b] PBGC disputed the termination of one of Falcon's plans, but lost the appeal. The termination of this plan which covers 72 employees and represents a UGL of about $974,000 is pending. Source: PBGC {End of table] * Employees may still receive some DB benefits when a DB plan is terminated. • While covered participants receive a pension benefit from the PBGC, the level of guarantee varies[Footnote 16]. PBGC officials stated that most individuals receive their full benefit if the pension is terminated. However, the percentage receiving their full benefit when a plan terminates has decreased. This is, in part, attributable to the rise in terminations of airline pilots’ pension plans[Footnote 17]. * According to PBGC, it does not collect data on the percentage of benefits that individuals receive. * Some employers that terminated their DB plans created “follow-on” DC plans or increased their contributions to an existing DC plan. For example, Delta Air Lines, which recently emerged from bankruptcy, increased its DC plan contribution. * PBGC may file claims against the debtor for the unfunded benefit liability amount, among other things. PBGC officials stated that PBGC uses a portion of the recoveries on claims to pay non-guaranteed benefits to plan participants. More Is Known about Benefit Changes Subject to Court Approval: Retiree Health Benefits: * Several bankruptcy professionals stated that employers consider changing retiree health benefits, in part, because they often carry a high cost and are not usually prefunded. * In the year prior to and after BAPCPA, 18 of the 115 employers reported retiree health benefit obligations. * 5 of these (one post-BAPCPA case) sought to modify benefits. Several others changed their benefits prior to bankruptcy. Table 2: Information on Employers That Filed to Modify Retiree Health Benefits, Year Prior to Filing for Bankruptcy (dollars in millions): Employer[a]: Delphi Corporation; Other postretirement benefit obligations (OPEB)[b]: $9,600; Total employer liabilities: $19,934; Employer[a]: Delta Airlines, Inc.; Other postretirement benefit obligations (OPEB)[b]: $1,835; Total employer liabilities: $26,789; Employer[a]: Dana Corporation; Other postretirement benefit obligations (OPEB)[b]: $1,543; Total employer liabilities: $6,608; Employer[a]: Northwest Airlines Corporation; Other postretirement benefit obligations (OPEB)[b]: $926; Total employer liabilities: $16,866; Employer[a]: Tower Automotive, Inc.; Other postretirement benefit obligations (OPEB)[b]: $173; Total employer liabilities: $2,681; [a] Allied Holdings, Inc. withdrew its motion to terminate certain nonunion retiree health benefits. [b] Postemployment benefit obligations across companies are not comparable because companies have wide latitude in the assumptions they use to calculate these obligations. Other postretirement benefits may include medical, life, dental, vision, or other insurance benefits. Source: Most recently available SEC 10-k filings prior to bankruptcy. [End of table] * Several bankruptcy professionals stated that modifications to retiree health benefits will have the biggest effect on individuals because these benefits generally are not insured by the government or funded and held in trust. Similarly, participants do not generally have statutory vesting rights. * To help mitigate some of the potential negative effect on participants, some employers created a fund to help pay for certain retiree health benefits. For example, the Dana Corporation and Tower Automotive both set up voluntary employee beneficiary associations (VEBA)[Footnote 18] and funded these accounts for retirees whose health coverage was eliminated. * Some federal provisions such as those requiring employers to offer continuation coverage, or the Health Coverage Tax Credit (HCTC)[Footnote 19], may also help to mitigate the potential negative effect. More Is Known about Benefit Changes Subject to Court Approval: CBAs: * The presence of a collective bargaining agreement adds another layer of complexity to how employers may treat benefits. Twenty-eight of the 115 public employers reported having at least some employees who were represented by a union. * Eight of the 28 employers that reported union representation sought to modify or reject their CBAs: - Generally, employers and unions negotiate the changes to the CBA. Negotiations often include wage and benefit cuts. - Many of the employers terminating their DB plans, and all 5 employers modifying retiree health benefits had CBAs. * Changes to wages or benefit packages may be made to the CBA leading up to bankruptcy filing. Table 3: Examples of Changes Made to Collective Bargaining Agreements Employer: ATA Holdings Corporation; Examples of CBA Changes: 20 per cent wage cut; Examples of CBA Changes: Stopped some employer contributions to the DC plan. Employer: Dana Corporation; Examples of CBA Changes: terminated nonpension retiree benefits for autoworker and steelworker union employees and started a VEBA; Examples of CBA Changes: Froze DB plan for employees with less than 20 years of service and replaced it with a DC plan; Examples of CBA Changes: Changed wage structure. Employer: Delphi Corporation[a]; Examples of CBA Changes: Froze DB pensions and started a 401(k) plan with a 7 percent employer contribution for Delphi employees; Examples of CBA Changes: Terminated the postretirement benefits and provided an additional 1 percent employer contribution to the 401(k) plan for Delphi employees. Employer: Delta Airlines, Inc.; Examples of CBA Changes: Terminated pilots' DB plan. Employer: Falcon Products, Inc.; Examples of CBA Changes: Terminated DB plan (previously froze nonunion DB plan) and started a 401(k) with no match; Examples of CBA Changes: Modified medical benefits; Examples of CBA Changes: Modified work rules. Employer: Northwest Airlines Corporation; Examples of CBA Changes: 21 percent wage reduction for the flight attendants' employee union; Examples of CBA Changes: Froze DB plan and replaced it with DC plan that included a 5 percent employer contribution; Examples of CBA Changes: Machinists' union employees - replacement DB plan; Examples of CBA Changes: Increases to unions' health premiums ranging from 5 percent to 25 percent depending on the union affected. Employer: Tower Automotive, Inc.; Examples of CBA Changes: 4 percent wage reduction; Examples of CBA Changes: Froze DB pensions and started a 401(k) with a 2-5 percent employer contribution depending on the union affected. [a] Delphi was spun off from General Motors (GM) in 1999, and the separation agreement included language that made GM contingently liable for postretirement benefits for Delphi employees who worked for GM before the separation. Some eligible Delphi employees retain their DB pension benefits. GM provides posretirement medical and employer paid retirement life insurance to some eligible Delphi employees. Source: GAO review of court documents and news articles. [End of table] Limited Information Is Available on Benefit Changes Not Subject to Court Approval: * In most of the cases we reviewed, employers received court approval—usually in first day orders—to continue employee benefits. While court approval allows employers to continue their benefit programs, it may not require them to do so. * Employers may stop making matching contributions during bankruptcy or seek to terminate their DC plans, but absent a contractual agreement often do not file for approval from the court. Several of the employers halted their contributions (at least temporarily) prior to bankruptcy. * Some professionals stated that employers may miss DC plan or health plan contribution payments or not remit pension contributions to the trusts in a timely manner, and this could lessen individuals’ benefits. According to EBSA officials, employee contributions not remitted to the trust are sometimes difficult to track. * To the extent an employer fails to remit certain employee benefit plan contributions, such as DC plan or health plan contributions owed, EBSA may file a proof of claim and/or commence an adversary proceeding against a debtor. Concluding Observations: * Many stakeholders are involved in the decision to modify benefits, and striking a balance between maintaining employee benefit programs and successful reorganization can be difficult for all parties involved. * While additional time may be needed to more fully understand how some aspects of BAPCPA and PPA affect benefits in specific cases, the full impact of both pieces of legislation on individuals’ benefits or federal agencies may never be known because employers’ decisions to modify benefits are part of a more complex process, and bankruptcy and pension laws are only part of this process. [End of section] Appendix II: Select Information on Bankruptcy Cases Reviewed: (Dollars in millions): Post-BAPCPA cases: Company name[A]: Sea Containers Ltd.; File date: 2006-10-15; Total assets: 2.4; Total liabilities: 1.9; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:[Empty]. Company name[A]: Delta Woodside Industries, Inc.; File date: 2006-10-13; Total assets: 38.2; Total liabilities: 2.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Anvil Holdings, Inc.; File date: 2006-10-02; Total assets: 108.3; Total liabilities: 231.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Global Power Equipment Group, Inc.; File date: 2006-09-28; Total assets: 366.9; Total liabilities: 204.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: The Rowe Companies; File date: 2006-09-18; Total assets: 134.2; Total liabilities: 86.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Naturade, Inc.; File date: 2006-08-31; Total assets: 12.0; Total liabilities: 13.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Portrait Corporation of America, Inc.; File date: 2006-08-31; Total assets: 0.2; Total liabilities: 0.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Unicomp, Inc.; File date: 2006-08-25; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Fischer Imaging Corporation; File date: 2006-08-22; Total assets: 14.7; Total liabilities: 9.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Deja Foods, Inc.; File date: 2006-08-14; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Vesta Insurance Group, Inc.; File date: 2006-07-18; Total assets: 1,980.8; Total liabilities: 1,880.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: OneTravel Holdings, Inc.; File date: 2006-07-07; Total assets: 84.3; Total liabilities: 76.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Image Innovations Holdings Inc.; File date: 2006-07-06; Total assets: 7.5; Total liabilities: 2.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Transcapital Financial Corporation; File date: 2006-06-19; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: America Capital Corporation; File date: 2006-06-19; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Werner Holding Co.; File date: 2006-06-12; Total assets: 283.6; Total liabilities: 463.7; DB Obligations at Bankruptcy[B,C,D]: 67.9; Other postretirement benefit obligations at bankruptcy[B,C]: 3.3; Collective bargaining agreement: Yes. Company name[A]: Airnet Communications Corporation; File date: 2006-05-22; Total assets: 29.0; Total liabilities: 8.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Silicon Graphics, Inc.; File date: 2006-05-08; Total assets: 452.1; Total liabilities: 643.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: IDI Global, Inc.; File date: 2006-04-17; Total assets: 2.2; Total liabilities: 3.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: USA Commerical Mortgage Company; File date: 2006-04-13; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Prosoft Learning Corporation; File date: 2006-04-12; Total assets: 8.6; Total liabilities: 4.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Verilink Corporation; File date: 2006-04-09; Total assets: 42.3; Total liabilities: 26.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Trans-Industries, Inc.; File date: 2006-04-03; Total assets: 15.7; Total liabilities: 13.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: SeraCare Life Sciences, Inc.; File date: 2006-03-22; Total assets: 89.1; Total liabilities: 43.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Oneida Ltd.; File date: 2006-03-19; Total assets: 300.2; Total liabilities: 333.5; DB Obligations at Bankruptcy[B,C,D]: 79.6; Other postretirement benefit obligations at bankruptcy[B,C]: 2.5; Collective bargaining agreement: Yes. Company name[A]: Televideo, Inc.; File date: 2006-03-14; Total assets: 9.1; Total liabilities: 14.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: The Plusfunds Group, Inc.; File date: 2006-03-06; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Dana Corporation; File date: 2006-03-03; Total assets: 9,019.0; Total liabilities: 6,608.0; DB Obligations at Bankruptcy[B,C,D]: 2,151.0; Other postretirement benefit obligations at bankruptcy[B,C]: 1,543.0; Collective bargaining agreement: Yes. Company name[A]: Integrated Electrical Services, Inc.; File date: 2006-02-14; Total assets: 580.9; Total liabilities: 437.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Glycogenesys, Inc.; File date: 2006-02-02; Total assets: 3.1; Total liabilities: 1.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Large Scale Biology Corporation; File date: 2006-01-09; Total assets: 12.8; Total liabilities: 1.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Calpine Corporation; File date: 2005-12-20; Total assets: 27,216.1; Total liabilities: 22,235.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Desert Health Products, Inc.; File date: 2005-12-15; Total assets: 0.3; Total liabilities: 4.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Syndicated Food Service International, Inc.; File date: 2005-12-14; Total assets: 9.0; Total liabilities: 11.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: FLYi, Inc.; File date: 2005-11-07; Total assets: 677.7; Total liabilities: 510.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: 21st Century Technologies, Inc.; File date: 2005-11-01; Total assets: 13.5; Total liabilities: 2.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Mcleodusa Incorporated; File date: 2005-10-28; Total assets: 1,025.8; Total liabilities: 997.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Refco, Inc.; File date: 2005-10-17; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Pre-BAPCPA cases: Company name[A]: The Boyds Collection, Ltd.; File date: 2005-10-16; Total assets: 223.0; Total liabilities: 85.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Pliant Corporation; File date: 2006-01-03; Total assets: 820.9; Total liabilities: 1,455.8; DB Obligations at Bankruptcy[B,C,D]: 87.2; Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Gardenburger, Inc.; File date: 2005-10-14; Total assets: 19.9; Total liabilities: 101.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Dynamic Sciences International; File date: 2005-10-14; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Cyber Care, Inc.; File date: 2005-10-14; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Jacobson Resonance Enterprises, Inc.; File date: 2005-10-13; Total assets: 0.3; Total liabilities: 2.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Stassi Interaxx, Inc.; File date: 2005-10-13; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Delphi Corporation; File date: 2005-10-08; Total assets: 16,593.0; Total liabilities: 19,934.0; DB Obligations at Bankruptcy[B,C,D]: 12,872.0; Other postretirement benefit obligations at bankruptcy[B,C]: 9,605.0; Collective bargaining agreement: Yes. Company name[A]: Epixtar Corp.; File date: 2005-10-06; Total assets: 18.0; Total liabilities: 18.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Tectonic Network, Inc.; File date: 2005-10-03; Total assets: 10.8; Total liabilities: 6.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: GB Holdings, Inc.; File date: 2005-09-29; Total assets: 217.0; Total liabilities: 181.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:Yes. Company name[A]: Home Directors, Inc.; File date: 2005-09-28; Total assets: 8.7; Total liabilities: 2.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Thermoview Industries Inc.; File date: 2005-09-26; Total assets: 30.2; Total liabilities: 33.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Entergy New Orleans, Inc.; File date: 2005-09-23; Total assets: 662.8; Total liabilities: 488.5; DB Obligations at Bankruptcy[B,C,D]: 78.4; Other postretirement benefit obligations at bankruptcy[B,C]: 54.8; Collective bargaining agreement: Yes. Company name[A]: Foamex International; File date: 2005-09-19; Total assets: 645.7; Total liabilities: 1,004.0; DB Obligations at Bankruptcy[B,C,D]: 143.9; Other postretirement benefit obligations at bankruptcy[B,C]: 1.2; Collective bargaining agreement: Yes. Company name[A]: Northwest Airlines Corporation; File date: 2005-09-14; Total assets: 14,042.0; Total liabilities: 16,866.0; DB Obligations at Bankruptcy[B,C,D]: 9,245.0; Other postretirement benefit obligations at bankruptcy[B,C]: 926.0; Collective bargaining agreement: Yes. Company name[A]: Delta Air Lines, Inc.; File date: 2005-09-14; Total assets: 21,801.0; Total liabilities: 27,597.0; DB Obligations at Bankruptcy[B,C,D]: 12,100.0; Other postretirement benefit obligations at bankruptcy[B,C]: 1,835.0; Collective bargaining agreement: Yes. Company name[A]: Three-five Systems Inc.; File date: 2005-09-08; Total assets: 111.8; Total liabilities: 46.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: (NULL). Company name[A]: Trans Max Technologies, Inc.; File date: 2005-09-08; Total assets: 1.8; Total liabilities: 2.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: (NULL). Company name[A]: Arlington Hospitality, Inc.; File date: 2005-08-31; Total assets: 103.4; Total liabilities: 90.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: (NULL). Company name[A]: Anchor Glass Container Corporation; File date: 2005-08-08; Total assets: 657.2; Total liabilities: 472.0; DB Obligations at Bankruptcy[B,C,D]: 55.8; Other postretirement benefit obligations at bankruptcy[B,C]: 53.8; Collective bargaining agreement: Yes. Company name[A]: Teraforce Technology Corp.; File date: 2005-08-03; Total assets: 3.0; Total liabilities: 11.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: (NULL). Company name[A]: Allied Holdings, Inc.; File date: 2005-07-31; Total assets: 421.5; Total liabilities: 463.1; DB Obligations at Bankruptcy[B,C,D]: 52.9; Other postretirement benefit obligations at bankruptcy[B,C]: 15.9; Collective bargaining agreement: Yes. Company name[A]: Able Laboratories, Inc.; File date: 2005-07-18; Total assets: 104.3; Total liabilities: 8.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: The Project Group, Inc.; File date: 2005-07-15; Total assets: 0.4; Total liabilities: 1.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Frontier Insurance Group, Inc.; File date: 2005-07-05; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Torch Offshore, Inc.; File date: 2005-01-07; Total assets: 169.9; Total liabilities: 99.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Aura Systems, Inc.; File date: 2005-06-24; Total assets: 17.8; Total liabilities: 20.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Heartland Technology, Inc.; File date: 2005-06-15; Total assets: 11.7; Total liabilities: 6.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Skyway Communications Holding; File date: 2005-06-14; Total assets: 7.0; Total liabilities: 4.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Proxim Corporation; File date: 2005-06-11; Total assets: 63.6; Total liabilities: 108.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Universal Automotive Industries, Inc.; File date: 2005-05-26; Total assets: 32.6; Total liabilities: 30.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Greentech USA, Inc.; File date: 2005-05-24; Total assets: 3.4; Total liabilities: 2.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Western Water Company; File date: 2005-05-24; Total assets: 16.9; Total liabilities: 9.9; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Global Environmental Energy Co.; File date: 2005-05-19; Total assets: 35.7; Total liabilities: 35.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Collins & Aikman Corporation; File date: 2005-05-17; Total assets: 3,191.2; Total liabilities: 2,750.9; DB Obligations at Bankruptcy[B,C,D]: 444.6; Other postretirement benefit obligations at bankruptcy[B,C]: 100.2; Collective bargaining agreement: Yes. Company name[A]: Certified HR Services Company; File date: 2005-05-12; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: AAIPHARMA Inc.; File date: 2005-05-10; Total assets: 339.1; Total liabilities: 451.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Natural Golf Corporation; File date: 2005-05-10; Total assets: 1.2; Total liabilities: 2.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Composite Technology Corporation; File date: 2005-05-05; Total assets: 18.1; Total liabilities: 12.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Composite Solutions, Inc.; File date: 2005-05-05; Total assets: 914.1; Total liabilities: 900.5; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Summit National Group, Inc.; File date: 2005-04-21; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Eagle Picher Holdings, Inc.; File date: 2005-04-11; Total assets: 598.8; Total liabilities: 740.8; DB Obligations at Bankruptcy[B,C,D]: 259.8; Other postretirement benefit obligations at bankruptcy[B,C]: 9.3; Collective bargaining agreement: Yes. Company name[A]: Southern Investors Service Company; File date: 2005-04-08; Total assets: 2.4; Total liabilities: 8.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Tom's Foods Inc.; File date: 2005-04-06; Total assets: 101.3; Total liabilities: 108.4; DB Obligations at Bankruptcy[B,C,D]: 57.1; Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Claremont Technologies Corporation; File date: 2005-03-25; Total assets: 0.0; Total liabilities: 0.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Intercell International Corporation; File date: 2005-03-16; Total assets: 0.3; Total liabilities: 0.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: V-one Corporation; File date: 2005-03-11; Total assets: 0.9; Total liabilities: 2.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: WHX Corporation; File date: 2005-03-07; Total assets: 311.9; Total liabilities: 408.8; DB Obligations at Bankruptcy[B,C,D]: 410.2; Other postretirement benefit obligations at bankruptcy[B,C]: 8.6; Collective bargaining agreement: Yes. Company name[A]: Skin Nuvo International, LLC; File date: 2005-03-07; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: HealthEssentials Solutions, Inc.; File date: 2005-03-01; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Veritec Inc.; File date: 2005-02-28; Total assets: 1.7; Total liabilities: 3.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Las Americas Broadband Inc.; File date: 2005-02-28; Total assets: 0.8; Total liabilities: 3.8; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Terra Telecommunications Corp; File date: 2005-02-22; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: WINN-DIXIE Stores, Inc.; File date: 2005-02-21; Total assets: 2,618.9; Total liabilities: 1,701.5; DB Obligations at Bankruptcy[B,C,D]: 68.8; Other postretirement benefit obligations at bankruptcy[B,C]: 17.0; Collective bargaining agreement:(NULL). Company name[A]: Syratech Corporation; File date: 2005-02-16; Total assets: 118.6; Total liabilities: 174.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Tower Automotive, Inc.; File date: 2005-02-02; Total assets: 2,560.8; Total liabilities: 2,681.7; DB Obligations at Bankruptcy[B,C,D]: 280.7; Other postretirement benefit obligations at bankruptcy[B,C]: 173.0; Collective bargaining agreement: Yes. Company name[A]: Falcon Products, Inc.; File date: 2005-01-31; Total assets: 266.5; Total liabilities: 228.0; DB Obligations at Bankruptcy[B,C,D]: 41.7; Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: American Business Financial Services, Inc.; File date: 2005-01-21; Total assets: 1,042.9; Total liabilities: 1,031.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: First Virtual Communications, Inc.; File date: 2005-01-20; Total assets: 6.8; Total liabilities: 8.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: SGD Holdings, LTD; File date: 2005-01-20; Total assets: 6.8; Total liabilities: 4.4; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: American Banknote Corporation; File date: 2005-01-19; Total assets: 184.3; Total liabilities: 178.0; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]: 1.5; Collective bargaining agreement:(NULL). Company name[A]: Friedman's Inc.; File date: 2005-01-14; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Ultimate Electronics, Inc.; File date: 2005-01-11; Total assets: 336.2; Total liabilities: 137.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Acceptance Insurance Companies, Inc.; File date: 2005-01-07; Total assets: 279.3; Total liabilities: 376.7; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Trico Marine Service, Inc.; File date: 2004-12-21; Total assets: 585.2; Total liabilities: 443.2; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: The MIIX Group, Inc.; File date: 2004-12-20; Total assets: 1,278.6; Total liabilities: 1,557.2; DB Obligations at Bankruptcy[B,C,D]: 13.6; Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Tropical Sportswear Int'l Corporation; File date: 2004-12-16; Total assets: 214.3; Total liabilities: 191.5; DB Obligations at Bankruptcy[B,C,D]: 10.7; Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Yukos Oil Company; File date: 2004-12-14; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Applied Extrusion Technologies, Inc.; File date: 2004-12-01; Total assets: 407.5; Total liabilities: 413.3; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Amcast Industrial Corporation; File date: 2004-11-30; Total assets: 230.3; Total liabilities: 272.3; DB Obligations at Bankruptcy[B,C,D]: 114.4; Other postretirement benefit obligations at bankruptcy[B,C]: 0.6; Collective bargaining agreement: Yes. Company name[A]: Trump Hotel & Casino Resorts, Inc.; File date: 2004-11-21; Total assets: 1,396.5; Total liabilities: 1,482.9; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Shreveport Capital Corporation; File date: 2004-10-30; Total assets: 141.7; Total liabilities: 164.1; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: eB2B Commerce Inc.; File date: 2004-10-27; Total assets: NA; Total liabilities: NA; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: ATA Holdings Corporation; File date: 2004-10-26; Total assets: 651.1; Total liabilities: 1,571.6; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement: Yes. Company name[A]: Epicus Communications Group, Inc.; File date: 2004-10-25; Total assets: 7.6; Total liabilities: 16.9; DB Obligations at Bankruptcy[B,C,D]:(NULL); Other postretirement benefit obligations at bankruptcy[B,C]:(NULL); Collective bargaining agreement:(NULL). Company name[A]: Huffy Corporation; File date: 2004-10-20; Total assets: 293.0; Total liabilities: 220.3; DB Obligations at Bankruptcy[B,C,D]: 110.4; Other postretirement benefit obligations at bankruptcy[B,C]: 4.2; Collective bargaining agreement: Yes. NA = Not Available: [A] Company data may include information on all of its operating subsidiaries. [B] Benefit obligations may not be comparable across companies, because companies may have used different assumptions in calculating these obligations. [C] Blank cells means that no DB benefit obligations or OPEBs for non- executives were reported. [D] Some of the DB plans may have been terminated prior to bankruptcy. Source: GAO review of SEC 10-k filing data for the most recent year available prior to employer's bankruptcy filing and PACER documents. [End of table] [End of section] Appendix III: Comments from the Pension Benefit Guaranty Corporation: PBGC: Protecting America's Pensions: Pension Benefit Guaranty Corporation: 1200 K Street, N.W.,: Washington, D.C. 20005-4026: Office of the Director: SEP 04 2007: Barbara D. Bovbjerg, Director: Education, Workforce, and Income Security Issues: U.S. Government Accountability Office: Washington, D.C. 20548: Dear Ms. Bovbjerg: Thank you for the opportunity to comment on the draft version of your report entitled, "Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy." We especially appreciate your work in reviewing the factors that may impact decisions to seek to terminate a defined benefit pension plan or modify its provisions during the bankruptcy process. Your efforts are particularly noteworthy given the complexity of the subject. PBGC is monitoring the effects of both Bankruptcy Abuse Prevention and Consumer Protection Act and Pension Protection Act of 2006 on PBGC's insurance programs. To help protect those programs, PBGC actively monitors the financial health of plan sponsors that are in or facing bankruptcy as well as related corporate transactions. We look forward to continuing to work with your office in highlighting matters which may impact the defined benefit pension plans which PBGC insures. Signed by: Charles E. F. Millard: Interim Director: [End of section] Appendix IV: GAO Contacts and Staff Acknowledgments: GAO Contacts: Barbara D. Bovbjerg, Director (202) 512-7215: Staff Acknowledgments: The following staff members made major contributions to this report: David R. Lehrer, Assistant Director; Nyree M. Ryder, Analyst-in-Charge; Mee-Yong Rao; John J. Larsen; Susannah L. Compton; Gloria Hernandez- Saunders; Walter K. Vance; and Craig H. Winslow. [End of section] FOOTNOTES [1] In this report, we refer to companies that filed for chapter 11 protection under the Bankruptcy Code as employers. In the legislation, these employers are referred to as debtors, and if the management of such employers continue to operate the business during the pendency of the chapter 11 case, they are also referred to as debtors in possession. [2] DB plans generally provide a guaranteed pension based on salary and years of service, and are often provided as part of a collective bargaining agreement (CBA)--a written agreement or contract between an employer and a union that includes provisions on conditions of employment and the procedures to be used in settling disputes during the term of the contract. Employers may also offer a defined contribution (DC) plan in which the employer, participants, or both make contributions to an individual account, and the benefits are paid based on the contributions to and investment returns on this account. [3] For detailed information on the 115 employers we reviewed, see appendix II. [4] While we refer to "health benefits," which are a focus of this report, the Bankruptcy Code requires court approval for modification of retiree medical, surgical, or hospital care benefits, and any retiree benefits in the event of sickness, accident, disability, or death. 11 U.S.C. § 1114(a) and (e). [5] 29 U.S.C. § 141 et seq. [6] 45 U.S.C. § 151 et seq. [7] The benefits that employers offer are not mutually exclusive. For example, one employer may offer (and seek to change) pension benefits, retiree health benefits, and benefits covered under a collective bargaining agreement. In total, 15 employers sought to change at least some of their benefits. [8] While we refer to "health benefits," which are a focus of this report, the Bankruptcy Code requires court approval for modification of retiree medical, surgical, or hospital care benefits, and any retiree benefits in the event of sickness, accident, disability, or death. 11 U.S.C. § 1114(a) and (e). [9] In the event of the elimination or substantial elimination of health benefits during bankruptcy, covered employees and retirees must be offered continuation coverage at their own expense. 29 U.S.C. §§ 1161-1167. If an employee's or retiree's spouse has access to an employee health plan, coverage may also be available through it. [10] Courts may consider various criteria in evaluating the balance of equities, including the likelihood of an employer’s liquidating if the CBA is not rejected or other creditors’ claims. [11]The National Labor Relations Act is the primary law governing relations between unions and employers in the private sector. In the airline and railroad industries, labor relations are regulated by the Railway Labor Act (RLA). Under the RLA, CBAs do not expire but, rather, become amendable. [12]This includes the 115 companies that we reviewed. [13]A recent case concerning Dana Corporation dealt with KERPs. The Bankruptcy Court for the Southern District of New York ruled that the original proposed incentive plan was a “pay to stay” retention plan subject to the restrictions established by BAPCPA and not a “produce value for pay” plan, i.e., a true incentive plan. In re: Dana Corp., 351 B.R. 96 (Bankr. S.D.N.Y. 2006 ). Dana modified its plan by incorporating more stringent performance targets, and the court approved it. In re: Dana Corp., 358 B.R. 567 (Bankr. S.D.N.Y. 2006 ). [14]See GAO, Commercial Aviation: Bankruptcy and Pension Problems Are Symptoms of Underlying Structural Issues, GAO-05-945 (Washington, D.C.: Sept. 6, 2005). [15]See GAO, Employer-Sponsored Health and Retirement Benefits: Efforts to Control Employer Costs and the Implications for Workers, GAO-07-355 (Washington, D.C.: Mar. 30, 2007). [16]The maximum amount that PBGC guarantees is set each year under provisions of ERISA. This guarantee amount may be higher or lower, in part depending on the age of the individual receiving benefits. [17]Pilots typically have higher pension accruals and retire at an earlier age. These two factors contribute to a potential reduction in their pension benefits when they are derived from PBGC. [19]VEBA’s are trusts that an employer may establish to fund retiree health benefits such as medical, dental, disability, severance, and life insurance. According to Treasury, VEBA assets are not available to creditors in bankruptcy. [19]The HCTC is available to individuals age 55 or over who are currently being paid PBGC benefits or received a lump sum from PBGC after August 5, 2002, among other groups. 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