The U.S. Pension Benefit Guaranty Corp. (PBGC) is suing Renco Group Inc., a private holding company, for allegedly avoiding paying the pension plans of bankrupt steel company RG Steel, in which Renco Group had a controlling interest.
Specifically, PBGC accuses Renco Group of trying to reduce its ownership in RG Steel to keep it from having to fulfill RG Steel’s pension obligations. Before RG Steel filed for Chapter 11 bankruptcy in May 2012, Renco Group sold 24.5 percent of its ownership to an affiliate of Cerberus Capital Management, an investment firm.
PBGC is seeking $97 million in damages, to cover the unfunded plan benefit liabilities for 1,350 people, termination premiums and minimum funding contributions.
Read more at Reuters.
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