Reduced Pension Commitment after Bankruptcy
Mr. T Carting filed for bankruptcy in 2011 and listed the worker’s pension fund as by far the largest unsecured creditor, with $1.9 million in claims following Mr. T’s failure to make pension payments on behalf of their workers since 2006.
Mr. T initially proposed to pay only 40% of this claim to the workers’ pension fund while allowing the Toscanos and Zambrottas to retain full equity in the company.
Meanwhile, the pension fund alleged that, despite their claim of financial hardship, Mr. T had failed to disclose a total of $800,000 in large payments and loans to its shareholders and an “intertwined web” of 15 related companies affiliated with members of the Toscano and Zambrotta families prior to filing for bankruptcy. The pension fund also claimed an “astounding” 1,300% increase in purported “bad debt” expenses in the year before declaring bankruptcy.
Ultimately, Mr. T Carting appears to have settled with the pension fund for $1.3 million.