Kaiser objects to priority of pension claims

By Ellen Chang

Houston, Jan. 24 - Kaiser Aluminum Corp. said it objects to the 24 proofs of claim filed by the Pension Benefit Guaranty Corp., the U.S. government corporation that administers the defined benefit pension plan termination insurance program and guarantees the payment of certain pension benefits, according to court filing on Jan. 21.

The Houston-based aluminum company's objection covers both the administrative and priority status asserted in the claims and the liquidated amounts. PBGC's claim estimates unfunded benefit liabilities totaling about $620 million plus unliquidated amounts.

Kaiser said it is disputing the claims because the PBGC is listing liabilities for pension plans that have not been terminated.

In addition, Kaiser objected because a majority of the claims are attributable to services performed by employees before its Chapter 11 filing and the company received no benefit from the obligations after the filing.

The company also stated that other than the portion of the claims relating to post-bankruptcy benefit accruals and other fixed premium payments, the claims by PBGC are not actual expenses entitled to the administrative priority.

Kaiser said it is asking the court to determine the amount of the claims that will qualify for administrative expense status.

Kaiser filed for bankruptcy on Feb. 12, 2002 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 02-10429.

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