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Hope for pension campaigners |
23/09/2004, 10:21:15 |
Workers at the car parts manufacturer Turner & Newall could be offered hope of recovering their pension funds following a recent courtroom victory.
Administrators of the company have been granted the chance to appeal to a High Court judge to challenge what they call "an unfair" US plan to sell off the firm.
Turner & Newall's parent company Federal Mogul has been in chapter 11 bankruptcy protection in the US since October 2001 following a number of asbestos-related lawsuits.
The administrator, Kroll, and the scheme trustee believe that selling the UK operation separately could help raise more cash for the pension fund. However, the US firm have put forward a restructuring plan which could leave the pension fund virtually empty.
Trustees of the pension scheme, which has around 40,000 members, are worried there will be a £875 million gap in funds if the firm is forced into liquidation. |
Judge raises pensions hope at Turner & Newall
Rupert Jones
Thursday September 23, 2004
The Guardian
Pension scheme members who face huge losses hope that their hand has been strengthened by a courtroom victory yesterday in a battle over car parts company Turner & Newall and its pension fund.
The administrator of T&N and other British subsidiaries of US engineering giant Federal-Mogul won the chance to return to court to seek a judge's support for its view that a restructuring plan proposed by American bondholders is unfair. It is the latest twist in a saga which has left 40,000 people in Britain fearful for their pensions and fuelled calls for ministers to do more to help workers who lose part or all of their pensions when their employers go bust. Unions have said that as many as 17,500 current and former employees could lose up to 70% of their promised pensions if the £1bn T&N pension scheme is wound up. In addition, 22,000 pensioners would lose out through not receiving inflation-linked rises. Federal-Mogul is in Chapter 11 bankruptcy protection and faces lawsuits over T&N's former production of asbestos. Last month, union representatives met Federal-Mogul's principal creditors, led by the largest of its bondholders, billionaire US corporate raider Carl Icahn, to try to find a formula to bail out the scheme. But these talks failed to persuade the creditors to hand over more cash, and the pension scheme's trustee recently rejected their offer as insufficient. The administrator, Kroll, and the scheme trustee believe that selling the UK businesses separately could secure more cash to support the pension fund than would be achieved by accepting the US offer.
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