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PBGCVLTV
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Subject: PBGC v. LTV CORP., Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as
is being done in connection with this case, at the time the opinion is
issued. The syllabus constitutes no part of the opinion of the Court
but has been prepared by the Reporter of Decisions for the convenience
of the reader. See United States v. Detroit Lumber Co., 200 U. S. 321,
337.
SUPREME COURT OF THE UNITED STATES
Syllabus
PENSION BENEFIT GUARANTY CORPORATION
v. LTV CORP. et al.
certiorari to the united states court of appeals for the second circuit
Title IV of the Employee Retirement Income Security Act of 1974 (ERISA)
includes a mandatory Government insurance program that protects
private-sector workers participating in covered pension plans against the
termination of their plans before sufficient funds have been accumulated to
pay anticipated benefits. The program is administered by petitioner
Pension Benefit Guaranty Corporation (PBGC), which is responsible for
paying terminated plans' unfunded liabilities out of the proceeds of annual
premiums collected from employers maintaining ongoing plans. Respondent
LTV Corporation and many of its subsidiaries (collectively LTV) filed
reorganization petitions under the Bankruptcy Code for the purpose, inter
alia, of restructuring the pension obliga- tions of one of the subsidiaries
under three ERISA-covered, cronically underfunded pension plans (the
Plans), two of which could not be voluntarily terminated by LTV under
ERISA's terms because they resulted from collective-bargaining negotiations
with the United Steelworkers of America. In light of LTV's statement that
it could no longer provide complete funding, the PBGC sought involuntary
termination of the Plans to protect the insurance program from the risk of
large losses. After the District Court terminated the Plans, LTV and the
Steelworkers negotiated new pension arrangements, which the PBGC
characterized as "follow-on" plans; i. e., arrangements designed to wrap
around PBGC insurance benefits to provide substantially the same benefits
as would have been received had no termination occurred. Pursuant to its
anti- follow-on policy, which considers such plans to be "abusive" of the
in surance program, and in light of its perception that LTV's financial cir
cumstances had dramatically improved, the PBGC issued a Notice of
Restoration of the terminated Plans under 4047 of ERISA, which authorizes
the PBGC to undo a termination "in any . . . case in which [it] determines
such action to be appropriate and consistent with its duties under [Title
IV]." When LTV refused to comply with the restoration decision, the PBGC