Marsh Supermarkets has declared bankruptcy. Investors will come out of the proceedings whole. The employees not so much.
...although the sell-off allowed Sun Capital and its investors to recover their money and then some, the company entered bankruptcy leaving unpaid more than $80 million in debts to workers’ severance and pensions.
Taxpayers will pay some of that $80 million shortfall by way of the government pension insurer.
The unpaid pension debts mean that some retirees will get smaller checks. Much of the tab will be picked up by the government’s pension insurer, a federal agency facing its own budget shortfalls.
Private equity firms often loot a company just before declaring bankruptcy and then pass the losses onto the pensions. Dems have tried to prevent this common injustice.
In recent years, some in Congress have sought to change the bankruptcy laws to prevent companies from ditching pension debts through bankruptcy. Last year, Rep. Tim Ryan (D-Ohio) introduced a bill that would give pensions higher priority in bankruptcy payouts. He said that in 2016 alone, 146,000 pensioners overall had seen cuts to their benefits. It did not win passage.
Of course the GOP majority in the House and the Senate would never pass such a bill. Hopefully, Dems will try again in the new year.