Philadelphia Newspapers LLC's road out of bankruptcy protection has been slowed as the Pension Benefit Guaranty Corp. voiced objections to the publisher's planned reorganisation. The PBGC said the proposal does not adequately address how the company will honour its pension obligations, the Wall Street Journal reported today.

Court documents filed by PBGC on Thursday object to the publishing company's suggestion that the pension plan can be kept or terminated due to bankruptcy proceedings. Philadelphia Newspapers owns The Philadelphia Inquirer and Philadelphia Daily News, and the plan covers 250 present and retired employees, according to Editor & Publisher.
The federal corporation that guarantees 44 million Americans their pension payments disagreed that the pension programme was free to be scrapped, arguing the publisher must follow specific laws relating to the termination of pension contracts. The PBGC said so far the publisher's pension fund had missed around $10.3 million in payments, according to the WSJ.

The newspaper publisher last month announced a proposal that would see the company exit bankruptcy under the ownership of a group of investors who would put $35 million in the company as well as a $17 million letter of credit.

The reorganisation plan does not give information as to what will be done with pensions, according to E&P.