The Pension Benefit Guaranty Corporation (PBGC) and Sears Holding Corp. have entered into an agreement that protects the latter’s pension plan. The agreement protects them as well as the plan’s pension insurance; it also allows Sears Holding Corp. to continue to protect certain special-purpose subsidiaries’ assets.
The definitive documentation provides that the subsidiaries will grant springing liens on the protected assets in favor of the PBGC. The liens will be triggered by the following:
The agreement requires that Sears Holding Corp. complete the definitive documentation in 60 days.
Sears’ plan has 200,000 participants.
The definitive documentation provides that the subsidiaries will grant springing liens on the protected assets in favor of the PBGC. The liens will be triggered by the following:
- failure to make required contributions to the plan;
- prohibited transfers of ownership interests in the subsidiaries;
- termination of the plan; and
- bankruptcy of the company or certain of its subsidiaries.
The agreement requires that Sears Holding Corp. complete the definitive documentation in 60 days.
Sears’ plan has 200,000 participants.
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