Con-way settles CF pensions dispute
Con-way Inc. has agreed to settle a dispute with the Central States multiemployer pension fund for $8 million, the freight transportation conglomerate said last week in a U.S. Securities and Exchange Commission filing.
Central States had sought $662 million in unfunded pension liability related to the closure of Consolidated Freightways Corp. in 2002.
Consolidated Freightways, the biggest less-than-truckload carrier in the nation when it failed, was once owned by Con-way predecessor CNF Inc. before being spun off as a separate entity in 1996. CNF was also a large transportation holding company for name brands such as Menlo Worldwide Logistics and regional LTL carrier Con-way Transportation. In 2006, CNF borrowed the name of its successful motor carrier business and became a hands-on operating company that includes renamed LTL subsidiary Con-way Freight.
Employers submit contributions for each employee to the Teamsters pension fund as specified in their contract.
CF was assessed a withdrawal liability of roughly $319 million at the time of its bankruptcy. The demand for twice as much money reflects the increased levels of underfunding with the Central States pension plan experienced from 2002-2004, according to Con-way.
Under the settlement, Con-way agreed to drop its federal lawsuit contesting the Central States demand and requesting arbitration.
Con-way, headquartered in San Mateo, Calif., said it will assign any future proceeds from the CF bankruptcy process to Central States, but will retain amounts already received.
The bankruptcy court has approved $35.8 million in Con-way claims against CF, of which Con-way has received $5 million. It has also received $3 million from the sale of CF’s Canadian subsidiaries, which were not included as debtors in the bankruptcy process.
CF’s bankruptcy estate previously paid Central States about $59.5 million of its claim.
Central States agreed to drop all claims against Con-way related to contributions to the pension fund and the $662 million withdrawal liability assessment.
Con-way said the settlement does not constitute an admission of liability.