Japanese firm to pay PBGC $39.5M for pension in U.S. subsidiary's bankruptcy

The Pension Benefit Guaranty Corp. said Asahi Tec Corp., a Japanese metal casting and forging company, will pay the agency $39.5 million, settling a long-running legal dispute involving the pension plan of Asahi Tec subsidiary Metaldyne Corp.

In 2007, Asahi Tec purchased Metaldyne, a Plymouth, Michigan-based manufacturer of powertrain and chassis systems, for $1.2 billion. When Metaldyne filed for bankruptcy in 2009, the PBGC took over its pension plan and asked Asahi Tec to pay for the plan's nearly $200 million in unfunded liabilities, the PBGC said Tuesday.

That triggered a lengthy legal battle between the PBGC and Asahi Tec. Last year, a federal court in Washington ruled that Asahi Tec was liable for Metaldyne's pension plan liabilities, the PBGC said. That led to negotiations between the PBGC and Asahi Tec and ultimately to the settlement.

“We are pleased that PBGC and Asahi Tec have come to terms that resolve years of past and future litigation over Metaldyne's pension obligations,” Sanford Rich, PBGC's chief of negotiations and restructuring, said in a statement. “We believe that this case affirms that foreign companies are responsible for the pension obligations of American companies they acquire. We will continue to press this issue when appropriate.”