Opinion ID: 3022346
Heading Depth: 3
Heading Rank: 3

Heading: Proceedings in the Bankruptcy Court

Text: On October 7, 1996 Fruehauf filed for Chapter 11 bankruptcy protection in the District of Delaware. Fruehauf’s debts and liabilities totaled over $12 billion at this time, and it was liquidated to satisfy its creditors. Several purchasers bought Fruehauf’s assets in the United States and Europe. The most significant purchaser was Wabash National, L.P. (“Wabash”), which bought two manufacturing plants and 31 distribution centers in the United States for $55 million. Although the asset purchase agreement between Fruehauf and Wabash did not contain a commitment on Wabash’s part to retain any of Fruehauf’s employees after the sale, it did rehire approximately 475 unionized employees. Fruehauf’s remaining assets were placed in a liquidation trust (known as the “End of the Road Trust”), and the pension plan was taken over by appellee Pension Transfer Corporation (“PTC”), a subsidiary of the Trust. During the course of the bankruptcy case, Fruehauf sought and received the Bankruptcy Court’s approval of payments to key employees who had participated in the KERP. It did not seek Bankruptcy Court approval of disbursements under the Third Amendment. On January 20, 1998, Fruehauf (as debtor-in-possession) began an adversary proceeding in the Bankruptcy Court against the pension plan, alleging that payouts under the Third Amendment would result in a fraudulent transfer in violation of 7 11 U.S.C. § 548. The Bankruptcy Court granted Fruehauf’s request for a preliminary injunction against the pension plan and enjoined the plan from distributing payments under the Third Amendment. On October 27, 1999 the Bankruptcy Court approved Fruehauf’s amended reorganization plan and substituted PTC as the administrator of the pension plan. PTC thus replaced Fruehauf in the adversary action, which was transferred to the District Court.