• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Bankruptcy and pensions

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.



thomashill00

New member
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?
 

LdiJ

Senior Member
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?
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?
 

thomashill00

New member
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.
 

thomashill00

New member
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?
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.
 

adjusterjack

Senior Member
Shouldn't be too difficult for her (or you) to review her pension fund papers and figure out if the funds are being held by a third party or not. The first question, obviously, is from where do the checks come. That might provide a hint.
 
There is a ton of information on the Internet relating to your issue. Google:

“what happens to pension payments when employer files bankruptcy”

As to the specific Chapter 11 - in complex cases such as this, there is usually a web site set up with detailed information, copies of all documents filed in the case and a host of other items. While most information will be too technical for the general public, such web sites can be a great way to keep informed. Krystal and its subsidiaries (which have been designated as “complex”) has such a web site:

http://www.kccllc.net/krystal

Your mom is on the mailing matrix. She will get a ton of stuff that she will have no clue what to do with. Her pension should be fine but, if something happens, I am sure she will be notified.

Des.
 

Taxing Matters

Overtaxed Member
My mother is retired and receiving a pension from this multi-state fast food chain.
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.
 

izzie02

Active Member
Gone are they days of corporate raiders that bought companies solely get the assests of its pension funds. The government put a end to that, for the most part. They made companies hand over funds to be administered by third parties. That should also make pensions safe from creditors of the company. It's more complicated than that, but in a nutshell...
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top