NEW YORK (TheStreet) — The liquidation filing of Hostess Brands — the maker of consumer fattening favorites such as Ho Hos and Twinkies – also means that Americans may soon gorge themselves on the company’s massive pension liabilities.
Hostess’ liquidation — just like the recent bankruptcies of well known companies like Friendly Ice Cream and Eddie Bauer — raises the prospect that sophisticated private equity and distressed debt hedge fund investors are using courts to cast off unwanted pension obligations on U.S. taxpayers and put a losing investment back on the track.
Consider that also on Friday, the Pension Benefit Guaranty Corporation disclosed that its U.S. pension plan insurance deficit grew to a record $34 billion this year, the biggest shortfall in the federal agency’s history. PBGC guarantees employee pension plans after a company goes belly up, securing the retirement of roughly 43 million U.S. workers.
While PBGC doesn’t take government money directly – it’s funded by way of insurance premiums and portfolio returns – the agency’s head said on Friday that a growing deficit raises the prospect of taxpayer support.
ouch.
Bend over everyone. It’s not gonna just be the rich paying more taxes…lol….
