Interstate Bakeries asks court to postpone hearing on retirement plan payment action

By Caroline Salls

Pittsburgh, Dec. 1 - Interstate Bakeries Corp. asked the U.S. Bankruptcy Court for the Western District of Missouri to continue the hearing on the American Bakers Retirement Plan Trust's motion to force the company to seek a waiver of funding requirements by Dec. 15 or pay on the plan by June 15, 2007, according to a Friday court filing.

The company asked the court to postpone the hearing to either Dec. 19, Dec. 13 or Dec. 8, with Dec. 19 as its first choice, from Dec. 5 because it said the trust has failed to show cause as to why the hearing should be held before the Dec. 19 omnibus hearing date.

Interstate said the adverse consequences the trust asserts may befall the company if nothing happens before Dec. 15 could have been avoided by filing the motion anytime after June 15 and can still be avoided through alternate means available to the ABA and the other participating employers.

In addition, Interstate said it simply does not believe the adverse consequences alleged by the ABA will occur.

According to the ABA's motion, the retirement plan has been significantly underfunded since the inception of Interstate's Chapter 11 case, and, in addition to overall plan funding, the trust said the plan must comply with minimum funding standards on an annual basis.

The trust said Interstate paid the quarterly contributions assessed against it for the 2004 to 2005 plan year but did not pay its "true-up" contribution in June 2006 for the 2004 to 2005 plan year.

As a result, the plan said it may fail to meet the minimum funding requirements by $3.9 million for the plan year ended Sept. 30.

If the minimum funding requirements are not met, the trust said the IRS can impose excise taxes against participating employers in the amount of 110% of the accumulated funding deficiency, and a plan that fails to meet minimum funding requirements may be subject to an action by the Pension Benefit Guaranty Corp. for an involuntary termination of the plan.

Interstate, a Kansas City, Mo., bakery operator, filed for bankruptcy on Sept. 22, 2004. Its Chapter 11 case number is 04-45814.

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