London Fog granted court approval of $3.3 million PBGC settlement

By Caroline Salls

Pittsburgh, Jan. 9 - London Fog Group, Inc. obtained court approval of a settlement agreement with Pension Benefit Guaranty Corp. under which PBGC has agreed to support the company's plan of reorganization, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Nevada.

Under the agreement, PBGC will be allowed a $3.3 million general unsecured claim against London Fog in place of five previously filed claims against the company that totaled more than $8.2 million.

The pension plan will be terminated on the effective date of London Fog's liquidating plan of reorganization. Both parties will mutually release all claims against each other on the same date.

PBGC had previously filed three unsecured claims totaling $7.96 million and two administrative claims for a total of $225,115 against London Fog.

London Fog said in the settlement motion that it disagreed with PBGC's calculation and characterization of claims but had not yet filed a formal document objecting to the claims.

London Fog, a Seattle-based apparel company, filed for bankruptcy on March 20, 2006 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 06-50146.

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