GENERAL39554

• Permit No: M1977376
• IBM Index Class Name: General Documents
• Doc Name: APPLICATION OF DEBTORS TO EMPLOY LEBOUEF LAMB LEIBY & MACRAE AS COUNSEL
• Media Type: D
• Archive: No

li. Prior to the commencement of their Chapter 17.
eases, Debtors and the Railroad have shared administrative and
support services based within CF&i Steel Corporation and have, by
agreement, jointly managed their excess cash through joint
investments.
12. Debtors have a unity of interest and singleness of
purpose in connection with their Chapter it reorganization cases.
a. Debtors are, by federal statute, jointly and
severally liable for overwhelming pension selated obligations
arising under both ERISA and the Internal Revenue Code estimated
in excess of $140 million. ,deg 26 U.S.C. $ 412(c)(11)(H) and
29 U.S.C. § 3082(c)(11)(H) (pension contributions); 26 U:•S.C.
§ 4971(e)(2) (penalty excise taxes); Z9 U.S.C. § 1362(a) (pension
plan termination liability).
b. Debtors are unable to continue to fund the
pension obligations for which they are jointly and severally
liable, ineluflinq contributions in the approximate amounts of
512 million due in September, 1990 and 51.8 million due in
October, 1990, which were not paid. Their reorganization cases
under Chapter 11 were filed in order to prevent the destn~ction
o! their businesses through the accrual and snloreement of
pansion obligations and related penalty excise taxes. If not
protected by the automatic stay in bankruptcy, the assets of
Debtors aze subject to statutory liens foz pension related
obligations, Rgg 26 U.s.C. § a12(n)(1) (statutory lien for unpaid
pension contributions); 29 U.S.C. § 1368 (a) (statutory lien for
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