[Marxism] As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions. from The Washington Post
1999wildcat at gmail.com
Sat Dec 29 07:25:05 MST 2018
'“These private-equity firms buy a company, plunder it of any assets, and then send it into bankruptcy without paying employees,” said Eileen Appelbaum, an economist at the Center for Economic and Policy Research who studies private-equity transactions. “To anyone but a bankruptcy court, this looks like a swindle.”....
'For example, the part of the government’s pension insurer that backs up benefits for many unionized workers is projected to run out of money by 2025, leaving it unable to protect pensioners, many of whom are facing a wave of trouble: The private-sector pension funds covering more than 1 million unionized workers are expected to run out of money within the next 20 years, according to government estimates....
'Since bankruptcy law changed in 1978, Gotbaum said, “the business community has been inventing new uses of the bankruptcy courts. The private-equity community realized they could use Chapter 11 to do pension laundering.”....
'Although Sun Capital investors were basically repaid, the Marsh pension debts were not. The company was notified in May 2012 — just a few days after the Romney dinner — that it owed $62 million to the pension for warehouse workers. At the same time, it was behind millions of dollars to the pension covering store employees. Those debts remained largely unpaid at the time of bankruptcy.
'When Sun bought Marsh Supermarkets, the company had three retirement plans. One for the top five Marsh executives, one for the store employees, and one for the warehouse workers.
Only the executives’ plan, however, was fully funded under the sales agreement.... Meanwhile, the other two retirement plans — the worker pensions — were short millions of dollars.....
'He has received notices saying that the Central States pension is projected to run out of money in 2025. And that the government insurance program that normally would have insured those pension benefits is expected to go bust about the same time.
“Seems kind of funny that those two would run out of money at the same time,” Rainey said skeptically.
“But then, it’s not funny at all. If I lose my pension, what am I going to do? Who’s going to hire a 75-year-old man?” [That last is what I might have to ask in a few years if the carpenters pension goes belly up. Meanwhile, though, the union staffers have their own second pension. I very much doubt they'll be suffering too much.]
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