ATR nears crucial vote

August 11, 2003|LIZ MAPLES

Former ATR Wire and Cable employees who have made claims against the now-closed company must vote by 4 p.m. today on the company's plan to sell its property and equipment.

ATR cannot liquidate unless a majority of its interested parties, those it could owe money to, vote for the proposed plan.

Meanwhile, a government organization that insures companies' pension plans, Pension Benefits Guarantee Corporation, has reported that ATR's plan is underfunded by $9.5 million. The company disputes that amount, saying the shortages occurred before a Chapter 11 bankruptcy petition was filed and should not be considered a priority.

In a Chapter 11 liquidation, after the company and its equipment is sold the money is paid out based on a priority list.


PBGC will take over the case at a hearing Friday in Lexington and then will know more about what happened with the funds, said Jeffery Spiker, a PBGC spokesperson.

He said that in some cases bankrupt companies' underfunded pension funds can be likened to a house mortgage. If a person had a 30-year loan and the bank came at year 15 and asked for the money, most homeowners would be short. The same can be true of companies, it's not that they have missed payments, but that they didn't expect to need all the money at once.

ATR said that it had made all of its minimum payments into the pension fund.

The PBGC will guarantee some of that money within the guidelines set up by law. Benefits will be paid to employees based on their ages. For example, the maximum amount a 50-year-old single employee would receive is $1,282 a month, while the minimum for a married employee with a 50 percent benefit for their spouse after their death is $1,154.

Jim Wade, a former ATR employee, said that he was glad that he would be able to get some of his pension. Although he was upset that some administrative employees, including chief operating officer Mike Bewley, received incentive payments to work after the plant closed. The payments will total between $157,000 and $251,000. Those that stayed until May 31 received 20 percent of their annual salary, through June 30, 30 percent and July 31, 40 percent.

Those with claims against the company weren't able to vote on the payments because it was part of a Chapter 11 petition.

The company's bankruptcy attorney, Gregory Schaaf, said that such payments were normal for a company that files for bankruptcy because its administration is often apt to look for other jobs.

Bewley is responsible for marketing the plant and equipment. ATR reported in its petition that it has entered into negotiations with a foreign company to purchase.

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