Judge Confirms LTV’s Liability in Pension Case

A federal judge affirmed a U.S. Supreme Court ruling that ordered LTV Corp. to reassume liability for nearly $3 billion in employee pension plans that it stopped funding in 1987. The Dallas steel, aerospace and energy concern, which is in Chapter 11 bankruptcy reorganization, had opposed restoring the plans because it claimed that such a move could possibly force the company to liquidate. LTV lawyers had argued that the high court decided only legal issues regarding events that were 3 years old and had not taken into account the company’s current financial situation.

Attorneys for LTV’s various creditors had also urged against returning liability to the company, arguing that it could disrupt LTV’s attempts to reorganize. But U.S. District Judge Robert Sweet of Manhattan rejected the company’s and creditors’ position and granted a request by the federal Pension Benefit Guaranty Corp. to make LTVtake back responsibility for the pension plans.

In his 22-page decision, Sweet said: “In view of the Supreme Court’s holdihg, PBGC is entitled to attempt to restore the plans before determining the effect or propriety of such action.”

The PBGC insures pension benefits, much like the Federal Deposit Insurance Corp. insures bank deposits.