Is it the pension fund that is filing for bankruptcy or is it the fast food chain? What did they say in the letter regarding the pension fund?My mother is retired and receiving a pension from this multi-state fast food chain. She recently received a letter stating that they are filing for bankruptcy. At he moment she is continually receiving her pension. However will this affect her pension? Will she be deemed a creditor? Is there anything she need to do? will she be contacted if they plan to stop her pension and if so, what are her options?
The letter states: for the debtor listed above, which is, The Krystal company is named as the debtor,[ Krystal holdings, Inc. and K-square Acquisition Co. , LLC all have subsequent case numbers]. The letter does not mention the pension fund only that creditors, debtors, and trustees, should consult an attorney to protect their rights. The letter then basically explains what this means to creditors, though it doesn't mention pensions at all.Is it the pension fund that is filing for bankruptcy or is it the fast food chain? What did they say in the letter regarding the pension fund?
While it's possible the business is paying the pension directly it's not likely. Private employers usually set up a separate pension trust to fund and manage their pension plans to meet ERISA requirements. ERISA is the law that government pension and health plans of employers. So the chances are that her pension is actually being paid out of a pension trust. The assets of the trust are separate from the business assets of the company that are subject to the claims of creditors. For that reason her pension is probably ok, as despritfreya noted already. Also, the pension may be guaranteed at least to some extent by the Pension Benefit Guaranty Corporation, a government agency. That's not to say that the pension won't be impacted by the bankruptcy. It might affect it in some ways. For example, the company might decide to terminate its participation in its pension plans, which would particularly affect current employees. So it is worth it for your mom to keep up with what is going on in the bankruptcy. But assuming she's getting paid from a pension trust and that trust itself is sound, she should come out ok.My mother is retired and receiving a pension from this multi-state fast food chain.