LTV Will Add $3.1 Billion to Pension Plans

LTV Corp. took a big step toward resolving its 4 1/2-year-old bankruptcy case by agreeing in broad terms to pay $3.1 billion to under-funded pension plans.

The agreement, when complete, would end a long dispute between the Pension Benefit Guaranty Corp. and LTV over funds that cover 60,000 retirees and employees at the company’s steel unit in Cleveland.

The Dallas company and the pension corporation first agreed to the plan Monday night and were expected to take several days to work out details, spokesman Jim Bowman said Tuesday.

“The biggest single obstacle to our emerging from Chapter 11 has been, for a number of months, the pension issues,” Bowman said.

“That’s the roadblock that’s been up there for four years,” said analyst Craig Davis of R. D. Smith & Co., a New York investment firm that deals in the securities of distressed companies.

Chriss Street, a Los Angeles bankruptcy specialist who represents clients that hold LTV claims, predicted that an agreement would allow the company to emerge from bankruptcy in nine months. LTV is one of the nation’s largest steelmakers and defense manufacturers, with 1990 sales of $6.14 billion.

LTV’s stock, one of the most heavily traded issues Tuesday, gained 25 cents to trade at $1.25 on the New York Stock Exchange.

However, the pension corporation, a federal agency that insures the pensions of U.S. workers, cautioned that no agreement has been signed.

A corporation spokeswoman said an outline of the deal requires LTV to make a significant initial cash contribution to the three restored pension plans and to continue to contribute for 30 years until the plans are fully funded.

LTV topped a list released Monday by the agency of the nation’s 50 largest under-funded pension plans. The pension corporation’s ability in the LTV plans is $2.9 billion.

The company said its enormous pension obligations were a major reason for its bankruptcy filing in July, 1986.