Interstate Bakeries retirement trust's request to seek waiver or make plan payment denied

By Caroline Salls

Pittsburgh, Dec. 8 - The request made by Interstate Bakeries Corp.'s American Bakers Association Retirement Trust to require the company to either seek a waiver of its funding requirements by Dec. 15 or make contributions to the plan by June 15, 2007 was denied, according to a Friday filing with the U.S. Bankruptcy Court for the Western District of Missouri.

The trust is the fiduciary for the American Bakers Association Retirement Plan.

Specifically, the trust asked the court to require Interstate to file an application with the Internal Revenue Service no later than Dec. 15 seeking a waiver of the minimum funding requirements and setting forth the company's plan to resume making contributions to meet minimum funding requirements, or to make plan contributions by June 15, 2007 that satisfy the IRS' minimum funding requirements.

According to the motion, the company did not pay its "true-up" contribution in June 2006 for the 2004 to 2005 plan year. As a result, the trust said Interstate 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.

As previously reported, Interstate said in a motion to postpone the hearing that 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 American Bakers Association Retirement Plan and the other participating employers.

In addition, Interstate said it simply does not believe the adverse consequences alleged by the American Bakers Association Retirement Plan will occur.

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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