April 1 (Bloomberg) — Budd Co., a former maker of stainless steel passenger rail cars, filed for bankruptcy protection to modify benefits that it can't fully pay.
The company listed assets of as much as $500 million and debt of more than $1 billion in Chapter 11 documents filed last night in U.S. Bankruptcy Court in Chicago, where it is based.
Budd is no longer engaged in manufacturing and has no employees, it said in court papers. It said it can't pay the benefits in full and is seeking to change them to provide "fair and equitable treatment to its retirees and other creditors."
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As of the petition date, it has about $384 million in cash and estimates its liability for retiree benefits is more than $800 million, the company said.
Budd asked that a committee of retired employees be formed to represent about 5,900 ex-workers and dependents receiving company-paid benefits including health care.
Company founder Edward Gowen Budd started out as a machinist apprentice and helped build the Pennsylvania Railroad's first steel passenger car, according to the PBS Website. He started Budd Co. in 1912.
The case is In re Budd Co. Inc., 14-11873, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).
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