Monday, January 05, 2009

Con-way, Teamsters fund settle withdrawal liability

Con-way Inc. and the $26.8 billon Teamsters Central States, Southeast and Southwest Areas Pension Fund settled a dispute over an alleged $662 million in withdrawal liability from Consolidated Freightways Corp., a Con-way subsidiary spun off to stockholders in 1996, according to an SEC filing Dec. 31 by the San Mateo, Calif.-based company.

In the settlement, Con-way agreed to pay $8 million to the pension fund and assign any future proceeds from the Consolidated Freightways bankruptcy. In 2002, Consolidated Freightways filed for Chapter 11 bankruptcy protection, and Con-way filed claims totaling $35.8 million, said Gary Frantz, Con-way director of communications.

Con-way has received $5 million so far from its claims, which the company will retain, Mr. Frantz said. He couldn’t estimate the amount Central States could eventually receive. The proceeds Con-way received amounted to 14 cents for each dollar of claims paid, according to the SEC filing.

Under the settlement, Con-way agreed to drop its federal lawsuit against Rosemont, Ill-based Central States and its arbitration demand that rejected the withdrawal liability the multiemployer fund assessed against Con-way as a result of the bankruptcy filing.

“The settlement agreement does not constitute an admission of liability by Con-way,” Mr. Frantz said.

Mark F. Angerame, Central States CFO, couldn’t be reached for comment.

Con-way has a non-union work force and has no employees in the Central States fund, Mr. Frantz said.

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