Hardwick Clothes Inc. is standing by its statements from earlier this week on the reasons for its bankruptcy filing in light of a statement released Thursday by the federal agency the company claims forced the issue.
Sanford Rich, chief of negotiations and restructuring for the Pension Benefit Guaranty Corporation, said the agency did not take any action that forced Hardwick Clothes into bankruptcy and the company should not “be allowed to shirk their legal responsibilities.”
Hardwick Chairman and President Tommy Hopper said the company stands by its statements concerning what has happened and the company’s history of paying its bills.
The PBGC, the federal agency responsible for protecting privately run pension benefits, pushed back against Hopper’s statements to the Cleveland Daily Banner concerning the circumstances that led to Hardwick’s legal action.
Hardwick filed for bankruptcy Monday after the PBGC threatened to place a $2.3 million tax lien if the company did not pay $7.3 million.
When asked about the bankruptcy filing, Hopper told the Banner the company had asked for additional talks and consultations. The response of the PBGC was a request for additional information.
“But after sending them the added information, there were no calls or contacts from them,” Hopper said Tuesday. “We then received another notice on Nov. 22 to pay by Dec. 2 or there would be a lien of $2.3 million.”
Hopper said this morning he felt no need to respond to the agency’s press release.
“We firmly stand by our earlier statements,” Hopper said. “We look forward to arriving to the end of this process as an even stronger and vibrant company than we are now.”
In a statement released to the Banner, Rich said the agency “provides a safety net for the country’s privately-run pensions and we provided that service to Hardwick.
“They came to us in January 2012, claiming financial hardship and asked for a distress termination,” Rich said. “After assessing Hardwick’s finances, we agreed on July 31, 2013, to take over paying pension benefits for more than 600 people in Hardwick’s plan.”
Rich said the agency estimated Hardwick’s pension plan had about $10.8 million in assets to cover $15.4 million in benefits.
“That means they still owe us at least $4.6 million,” Rich said. “The company was well aware of this debt at the time we stepped in.”
Rich said Hardwick had the opportunity to settle the debt during negotiations this fall but did not suggest a payment plan.
“So in late November, we told them that a $2.3 million lien would be filed against them in early December. They didn’t respond before filing for bankruptcy and PBGC never actually placed the lien,” Rich said.
He added the agency always works with companies to “preserve both pensions and jobs and to help companies avoid bankruptcy.”
“Unfortunately, Hardwick wasn’t willing to work with us,” Rich said. “There’s no reason that they should be allowed to shirk their legal responsibilities at the expense of other companies that pay us premiums.”
In a previous statement, Hopper stressed, “Our history has been to always pay our bills and do everything we are supposed to do. That’s what we did.”