We Counted The Cost Of Keeping Every Pension Promise

Ruth drew three boxes on a sheet of paper.

"The pension protection. The money needed to run the remaining company. The money left for owners. We have to fund all three honestly."

I asked her to turn the paper toward me.

The sale price remained $18.4 million. About $2 million covered the listed closing costs and adjustments. The old company still needed its $2.3 million operating and claims reserve.

That left $14.1 million before pension protection and owner payments.

"The proposed consulting fee came from that last amount," Ruth said. "It wasn't extra money."

Canceling Preston's $3.6 million fee would cover much of the gap. Covering all of it would reduce what the ordinary owners expected too.

"They'll fight that," I said.

"They already are."

She showed me an owner's note offering future profits in place of protected pension cash. He wanted his own sale payment in full at closing.

"I'd like tomorrow's customers to pay us well," I said. "I can't count their orders as money we have today."

The pension specialist proposed $4.8 million in a restricted account at closing. With the plan's existing assets, it would cover the current insurance estimate, expenses, and a cushion.

An independent fiduciary would oversee the process. The old company would keep making required payments until the benefits had been secured. Nobody would have to surrender an earned benefit to get a check.

"Can we promise every person an insurance contract today?" I asked.

"No," Ruth said. "There are notices, checks, and final quotes. We can require the money, oversight, and a binding process. We cannot skip the process."

I ran my finger along the three boxes.

"Then put that difference in plain words."

By Thursday afternoon, we had a proposal.

The $4.8 million could be used only for pension funding and the approved benefit settlement costs. If more was needed, the seller had to cover it before owners received the last held portion of their money.

Owners would receive up to $9.3 million from the sale, subject to those protections and the final closing figures.

Preston's proposed fee would be canceled, not renamed.

The board would correct the share records and the employee notice. The independent review would continue, and any evidence of wrongdoing would be preserved for the proper authorities.

My two shares would be redeemed for $6,000 only after the sale protections were funded. That was the old offer, without a private premium.

Ruth added that the agreement would pay my reasonable legal costs. I had needed counsel to defend a right the company's own records should have honored.

Then I crossed out a draft clause requiring employees to release all past claims.

"They didn't put their signatures up for sale," I said.

That evening, the board held a meeting for workers and retirees at the plant. Everyone got the same short summary. Private benefit records stayed private.

Dale stood near the back.

"Why don't you just make the buyer take the pension?" he asked.

The pension specialist answered.

"The buyer hasn't agreed to that. This proposal funds a process to secure the existing benefits. It also keeps the seller responsible while that happens."

"And our jobs?" Renee asked.

Daniel stood.

"We intend to keep this plant operating. We will put a twelve-month protection against sale-related layoffs into the agreement, with the stated exceptions you can read. I can't promise what orders will look like forever."

It was less comforting than Preston's talk about a shining future. It was also something a lawyer could enforce.

Dale looked at me.

"You're getting your job back, I suppose."

"That isn't one of my consent terms."

"But you want it."

"I want useful work. I also want you to receive what you earned. Both things can be true."

He sat down without answering.

After the meeting, Marta Ortega took my hand.

"Luis kept his brass fishhook in a jar," she said. "You remember?"

I did. He had bent it from scrap and never caught a thing with it.

"We all saved strange things," I said.

At ten the next morning, Daniel's lender agreed to extend its approval, provided the parties signed the protection terms that day and met a revised closing schedule.

At eleven, the owners approved the smaller distribution. Two objected. The board's written authority and the required votes were checked before anyone moved on.

At noon, Nora called me.

"The board removed Preston as chief executive. The fee is rejected. We accepted your pension terms."

I closed my eyes.

"Send the signed copy to Ruth."

"There is something else. Preston has sent his own demand to the buyer."

An email arrived while she spoke.

It claimed that without his personal transition services, the plant's measurement system could not be trusted.