Fund asks Bankruptcy Court to allow continued payment to beneficiaries

The NMI Retirement Fund yesterday asked the U.S. District Court for the NMI Bankruptcy Division to allow for the continued payment of certain benefits to beneficiaries at the 100 percent level pending the court’s entry of the dismissal of the Fund’s Chapter 11 bankruptcy petition.

The Fund, through counsel Jeremy B. Coffey, informed the court that prior to filing this proposal, the Debtor (Fund) consulted with counsel for the Official Committee of Unsecured Creditors and the U.S. Trustee.

Coffee said the Official Committee does not object to such Fund’s request, while the Trustee did not express any objection but reserved all rights to interpose an objection upon the Fund’s submission of the proposal.

The Fund requested the court to schedule an expedited hearing on its proposal for continued payment.

Citing the background of the payment issue, Coffey said prior to the filing date of the Chapter 11 petition (April 17, 2012), the Fund established a subsidiary, Pension Holdings Corp., for the purpose of ensuring the continued payments of benefits, in full, for up to the first two months of this case.

At the same time, the lawyer said, the Fund began taking steps to seek court authority to gradually reduce the level at which benefits would be paid consistent with the Fund’s plan for the Chapter 11 case.

Coffey said with the June 2012 payment, Pension Holdings Corp. has now exhausted its funding and is no longer able to satisfy the Fund’s semi-monthly payment obligations.

The next such payment schedule is on or before July 1, 2012.

Coffey said in a memorandum decision delivered on June 13, 2012, Judge Robert J. Faris indicated his intent to enter an order of dismissal of the Chapter 11 case after consideration and payment of fee and administrative expense requests, which consideration could occur as late as July 27, 2012.

Coffey explained that if the Fund is unable to resume benefit payments until after the order of dismissal is entered, it would cause undue hardship on Fund members who rely on such benefit payments to meet basic food, shelter, clothing, and medical needs.

“Through this proposal, the Debtor seeks limited authority to resume benefit payments, beginning with the July 1, 2012 payment, until such time as the order dismissing this case is entered,” the lawyer said.