Sea Containers agrees to settle pension claims
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Bankrupt Sea Containers Ltd. has agreed to settle the claims of two pension schemes belonging to its London-based subsidiary Sea Containers Services Ltd.
The Bermuda-registered company said the agreement, which is subject to approval by the Delaware Bankruptcy Court and may be objected to by other creditors, is “a critical and positive milestone in its efforts to emerge from Chapter 11,” and will “avoid costly and protracted litigation in multiple and potentially competing jurisdictions.”
The major creditors involved are the 1983 and the 1990 pension funds, which have almost 1,500 members between them and are estimated to be in deficit by about $200 million, and the holders of four outstanding bond issues. The agreement also creates an additional reserve of $69 million for certain potential pension scheme liabilities in respect of age-related equalization changes.
Sea Containers on Jan. 31 withdrew its appeal against a Financial Support Direction (FSD) handed down by the United Kingdom’s Pensions Regulator in July last year, which sought to oblige the company to put in place additional financial support for the pension funds.
“Sea Containers considers that the settlement will adequately address any FSD and that the current legal proceedings would be of no further benefit. Sea Containers is therefore pleased to have reached a timely and consensual settlement with the trustees,” the company said in a statement.