Co-Op Bank Said to Face Pension Tangle in Latest Rescue Hurdle

U.S. hedge funds pushing to recapitalize Britain’s Co-Operative Bank Plc are mired in talks to shed the lender’s pension obligations from the Co-Op supermarket chain, according to people familiar with the matter.

A group of the bank’s bondholders are pushing to split its employee retirement plan away from the Co-Operative Group in talks involving the pension fund’s trustees, said the people, who asked not to be identified because the details are private. An agreement on the matter would be the final major step towards rescuing the lender, the people added.