Metaldyne former parent, PBGC enter $39.5 million pension settlement

By Caroline Salls

Pittsburgh, Nov. 5 – A dispute over Metaldyne Corp.’s pension liabilities was settled with former parent Asahi Tec agreeing to pay $39.5 million to the Pension Benefit Guaranty Corp., according to a PBGC news release.

The settlement between the PBGC and Asahi Tec resolves a four-year legal battle.

According to the release, Asahi Tec purchased Metaldyne in 2007 for $1.2 billion. When Metaldyne went bankrupt in 2009, PBGC asked Asahi Tec to assume the pensions of Metaldyne’s 10,000 workers and retirees and, after the pension plan terminated, to pay nearly $200 million in liabilities.

The PBGC said this sparked a dispute over whether American courts had jurisdiction over a company with no ongoing business in the United States.

In October 2013, PBGC received a favorable decision from the U.S. District Court in Washington, D.C., ruling that the court had jurisdiction over Asahi Tec and that the company was liable for the unfunded benefits and termination premiums of its bankrupt former subsidiary.

“We believe that this case affirms that foreign companies are responsible for pension obligations of American companies they acquire,” PBGC chief of negotiations and restructuring Sanford Rich said in the release.

“We will continue to press this issue when appropriate.”

Metaldyne, a Plymouth, Mich.-based maker of metal-based components, assemblies and modules for transportation-related powertrain and chassis applications, emerged from bankruptcy in March 2010.

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