Huffy granted distress termination of retirement plan

By Caroline Salls

Pittsburgh, Aug. 17 - Huffy Corp. obtained court authorization for a distress termination of its retirement plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

In its motion, the company said "termination of the plan is a vital component of [Huffy's] plan of reorganization, not only saving a significant amount of cash, but also allowing [Huffy] to attract necessary sources of liquidity to fund the reorganization," the company said in the filing.

According to the motion, termination of the retirement plan is necessary because current financial projections show that Huffy cannot survive past the end of 2005 - and could face liquidation much earlier if sales do not meet forecasts - without a source of additional cash.

Also, Huffy said it cannot obtain additional credit as long as its liabilities under the plan remain in place because the almost $21 million minimum required contributions to the plan over the next five years would consume all of the profits Huffy expects to earn during that same period.

According to Wednesday's order, the termination takes effect immediately.

Huffy, a Miamisburg, Ohio-based bicycle and sporting goods company, filed for bankruptcy on Oct. 20, 2004. Its Chapter 11 case number is 04-39148.

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