The Pension Benefit Guaranty Corp. is assuming responsibility
for about 3,000 workers and retirees of Alabama Aircraft Industries
Inc. (AAIIQ), a bankrupt airplane-maintenance company.
The PBGC estimates the Alabama Aircraft pension plan has $82.4
million to cover $142.8 million in benefit promises. The agency
expects to pay about $58.9 million of the $60.4 million
shortfall.
The Birmingham, Ala., company, which inspects and maintains
aging military jets, filed for Chapter 11 bankruptcy in February
with a plan to cut its debt and get rid of a pension plan it could
no longer afford. The company, in June, proposed selling itself
through a bankruptcy auction as it expects to run out of cash by
the end of July once its biggest defense contract runs out.
The PBGC is a federal corporation created in 1974 to protect the
pensions of nearly 44 million U.S. workers and retirees.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com