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News & Policy

Statement from PBGC Chief of Negotiations and Restructuring Sanford Rich on the Bankruptcy Filing of Hardwick Clothes Inc.

FOR IMMEDIATE RELEASE
December 05, 2013

WASHINGTON — Pension Benefit Guaranty Corporation Chief of Negotiations and Restructuring Sanford Rich released the following statement today on the bankruptcy filing of Hardwick Clothes Inc.

"Recent press reports suggest that our actions pushed Hardwick into bankruptcy. This isn't true. We provide a safety net for the country's privately run pensions, and we provided that service to Hardwick.

"They came to us in January 2012 claiming financial hardship, and asked for a distress termination. After assessing Hardwick's finances, we agreed on July 31, 2013 to take over paying pension benefits for more than 600 people in Hardwick's plan.

"According to our estimates the plan had about $10.8 million in assets to cover $15.4 million in benefits. That means they still owe us at least $4.6 million. The company was well aware of this debt at the time we stepped in.

"During negotiations this fall, Hardwick had the opportunity to settle this debt. They didn't suggest a payment plan. So in late November, we told them that a $2.3 million lien would be filed against them in early December. They didn't respond before filing for bankruptcy; PBGC never actually placed the lien.

"At PBGC we always work with companies to preserve both pensions and jobs, and to help companies avoid bankruptcy. Unfortunately, Hardwick wasn't willing to work with us. There's no reason that they should be allowed to shirk their legal responsibilities at the expense of other companies that pay us premiums."

About PBGC

PBGC protects the pension benefits of more than 42 million Americans in private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums, investment income, and with assets and recoveries from failed plans. For more information, visit PBGC.gov.

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PBGC No. 13-16