Company takes over a bankrupt company's DB plan

[rodin111]

Here is the story:

Company A sponsors a DB plan. Recently company A declared bankruptcy.

Company B - owned by the same owner as company A- purchased in auction, as the highest bidder- the bankrupt company. The purchase was approved by the bankruptcy court.

Company B assumed/hired all employees of the bankrupt company and wants to continue the plan giving all employees credit past service.

Question:

Excepting the corporate resolution of company B pertinent to the take over and continuance of the plan and the obvious changes in the 5500 reports (name, EIN, address, etc) and the amendment of the plan sponsor information in the Adoption Agreement:

• Any other documents to be executed?
• Does the bankrupt company purchased by have to adopt also a resolution regarding the transaction?
• Thanks for your help

[david rigby]

Was A purchased (all stock and other ownership interests), or just the assets of A? If the former, that implies A continues to exist as a subsidiary of B, and B automatically becomes the sponsor of the Plan.

If the plan is PBGC-covered, review the list of Reportable Events. Might need a Form PBGC 10 filing.

But be careful. Review the plan document, especially to see if the bankruptcy has automatically triggered a plan termination.

[rodin111]

Thanks for your input.

It was an asset purchase.

Still I am not sure about the documents that must be drafted by the company B, in order to take over/continue the plan. From the top of my head I can think of:

1. Corporate resolution stating that company B is taking over Company's A retirement Plan

2. Adoption Agreement amendment (Plan Sponsor Name, EIN, address, credit for past service in previous company)

Anything else ?

Will also check the plan Doc to see if Bankruptcy automatically trigger the plan termination.

Thanks again for help