A federal benefits agency is taking over the pension obligations of Furniture Brands International Inc., essentially making about 19,000 pensioners whole in their plans.
The Pension Benefits Guaranty Corp. said Thursday it will cover $270 million of the $272 million funding shortfall of the bankrupt company.
Furniture Brands’ overall benefits obligation is $609 million, of which the company had $337 million when the company entered Chapter 11 bankruptcy protection Sept. 9.
The agency’s decision comes on the day that KPS Capital Partners placed the only bid, at $280 million, for Furniture Brands’ assets. KPS’ bid was approved Oct. 2 by a U.S. Bankruptcy Court judge as the stalking horse offer. A stalking horse typically sets the floor for a potential auction bid.