Bakery’s Reduced Pension Pay Deal Not Assignable in Bankruptcy

A former large scale California bakery that reached a deal to reduce its employee pension obligations is barred from assuming and assigning that arrangement in bankruptcy, a federal appeals court ruled.

Bankruptcy law restricts Svenhard’s Swedish Bakery from passing on a “financial accommodation” it was given by The Bakery and Confectionary Union and Industry International Pension Fund to brand successor United States Bakery—commercially known as Franz Bakery—the US Court of Appeals for the Ninth Circuit ruled Friday.

Svenhard’s reached a deal with the pension fund to drastically lower what it might owe for employee plan payments after the bakery closed ...