Multiple sources report that the Pension Benefit Guaranty Corporation (PBGC) recently filed almost $92 million in liens against AMR Corp. (AMR), the parent company to American Airlines, Inc. (American), on behalf of American's four pension plans. The liens were filed against certain of AMR's US and foreign entities' assets that are not part of AMR bankruptcy proceedings.

American, which sponsors four pension plans that cover nearly 130,000 workers and retirees, filed for bankruptcy on November 29, 2011. The PBGC liens appear to respond in part to AMR's recent contribution of only $6.5 million to the pension plans (of the nearly $97 million contribution that would be required if it were outside bankruptcy). The US Bankruptcy Court of the Southern District of New York has allowed companies to classify parts of their pension contributions as pre-bankruptcy debt, which companies do not have to pay during bankruptcy proceedings.

This report is consistent with the PBGC's position outlined in its recent statement that AMR may not pass its pension costs onto the agency and must "maintain[s] responsibility for the plans and keep[s] the pension promises it has made."

This development is significant in particular because the PBGC placed liens on certain foreign assets of AMR that are not within the bankruptcy proceedings. Practitioners should be aware of further developments in this matter as liens filed by the PBGC may constitute events of default under certain credit and financing and other agreements, among other implications. For more information, see:

For more information on PBGC liens, see Practice Note, Defined Benefit Plans: Distress and Involuntary Terminations: Lien and Priority Status.