WestPoint Stevens' proposed case dismissal draws PBGC objection

By Caroline Salls

Pittsburgh, Sept. 6 - WestPoint Stevens, Inc.'s request for a dismissal of its Chapter 11 bankruptcy case drew objection from the Pension Benefit Guaranty Corp. in an attempt by the PBGC to protect its rights, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The PBGC said its rights to recover any amounts due under the company's pension plans, which were terminated on Aug. 8, "should not be extinguished by an order dismissing these Chapter 11 proceedings."

Moreover, it is unlikely that PBGC, a substantial creditor of WestPoint Stevens, will receive any benefit from the successful sale of the company's business, the filing said.

According to the objection, PBGC is obligated to pay benefits to more than 30,000 pension plan participants.

"These plans are significantly underfunded; PBGC will pay benefits to the plans' participants using approximately $260 million of its own funds," the objection said.

A hearing on dismissal of the case is scheduled for Sept. 13.

The West Point, Ga.-based textile firm filed for bankruptcy on June 1, 2003. Its Chapter 11 case number is 03-13532.

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