Harry & David Holdings Inc., a specialty-food retailer, received bankruptcy court permission to terminate the pensions of more than 2,700 workers, the Pension Benefit Guaranty Corp. said.
PBGC said in a statement today that it had told the court that Harry & David could afford to keep the plan and that the company was terminating it largely to increase investors’ returns, not out of necessity to emerge from bankruptcy.
“We’ve fought hard to get Harry & David to keep their pensions going,” PBGC Director Josh Gotbaum said in the statement. “Unfortunately, they decided not to, and the judge supported them.”
In May, the Medford, Oregon-based company filed papers in bankruptcy court seeking a so-called distress termination of the pension plan, saying it was under-funded by $23.6 million. Without termination, the company said that proposed investors wouldn’t provide $155 million needed to implement the Chapter 11 reorganization plan.
Stephanie Pillersdorf, a spokeswoman for Harry & David with outside public relations firm Sard Verbinnen & Co. in New York, didn’t immediately return a call to her office after regular business hours seeking comment on the pension termination.
The case is In re Harry & David Holdings, Inc., 11-10884, U.S. Bankruptcy Court, District of Delaware (Wilmington).