GM and US pension agency
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http://biz.yahoo.com/rb/060324/autos...ions.html?.v=1
US pension agency seeks outside legal advice on GM
Friday March 24, 7:49 am ET
WASHINGTON (Reuters) - The government agency responsible for insuring corporate pensions sought private legal advice this week to help sort through a range of possible financial scenarios involving General Motors Corp. including possible bankruptcy.
According to documents outlining its proposal, the Pension Benefit Guaranty Corp. would like outside lawyers to provide "advice and counsel" on the potential spinoff of GM's financing arm, General Motors Acceptance Corp.; the bankruptcy of Delphi Corp. (Other OTCPHIQ.PK - News), GM's chief parts supplier; and issues relating to GM pensions and work-force reductions and the prospects for a Chapter 11 bankruptcy filing or out-of-court restructuring.
"GM has suffered large losses; its credit rating has declined to well below investment grade; and there has been speculation in the press and elsewhere that the company may have to seek bankruptcy protection in the future," the agency said in its solicitation.
GM has said its pension liability at the end of 2005 was $10.9 billion -- the difference between assets and promised benefits.
PBGC insures pension benefits for more than 40,000 private pension plans covering 44 million people, or about one-third of the American work force.
The agency's deficit has ballooned to more than $22 billion in recent years as more companies, including steel companies and airlines, terminated traditional pensions in bankruptcy.
GM sponsors several pension plans, including a salaried plan with 200,000 participants and another covering current and former hourly workers with about 500,000 participants, according to the PBGC.
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