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LTV REORGANIZATION PLAN SEEN AS MAJOR STEP FORWARD

 LTV REORGANIZATION PLAN SEEN AS MAJOR STEP FORWARD
 WASHINGTON, Feb. 14 /PRNewswire/ -- The LTV Corporation's


(NYSE: QLTV) plan of reorganization, filed today with the bankruptcy court in New York, is a major step forward in protecting the pension promises made to workers and retirees and to the Pension Benefit Guaranty Corporation (PBGC), which faced the threat of $3.1 billion in unfunded pension obligations.
 "This action shows that when companies and their creditors take pension debts seriously, everyone benefits. Companies and their creditors in bankruptcy can reach agreement, and workers and retirees can receive their promised pensions," said Secretary of Labor and Chairman of PBGC's Board of Directors Lynn Martin.
 The reorganization plan contains the PBGC settlement reached earlier with LTV and subsequently with LTV's Steel Creditors' Committee, which provides for the funding of the three pension plans restored by PBGC.
 "This plan, reflecting the consensus of LTV and its creditors, can allow LTV to emerge from bankruptcy as a viable company responsibly meeting its pension promises," said PBGC Executive Director James Lockhart.
 However, Lockhart cautioned that before the reorganization plan can be confirmed by the bankruptcy court, LTV must still clear several hurdles, most notably the negotiation of a new collective bargaining agreement with the United Steelworkers' union.
 The settlement calls for an initial pension contribution to the pension plans of $1.5 billion, with the remainder to be spread out over a 30-year period. The payment schedule could be shortened because additional funding will be made in years when LTV's cash flow exceeds predetermined levels.
 "I am hopeful that LTV's example will be followed by other companies with underfunded pensions. It shows that a company can restructure with its pension plans intact," said Lockhart.
 Lockhart said that creative elements of the pension agreement negotiated by PBGC were instrumental in obtaining the creditors' consensus on the plan of reorganization.
 In addition to the initial cash contribution, the plan includes:
 -- Acceptance by PBGC of zero coupon bonds as a compromise for its $700 million claim for the underfunding of a fourth LTV pension plan that was terminated and not restored, and for payments by PBGC of guaranteed benefits to retirees during the restoration litigation;
 -- Investment by PBGC of $50 million in LTV common stock at market price, with the $50 million going into the pension plans; and
 -- Provision by PBGC of limited stock price support in the case of a downturn in return for a grant to PBGC of stock appreciation rights, which will give PBGC the opportunity to profit if the stock prices rise; creditors will receive most of their recoveries in the form of LTV stock.
 Noting that PBGC is already faced with a long-term deficit of $2.5 billion and an exposure of $30 billion to $45 billion from underfunded plans, Lockhart said it is important that companies and their creditors take pension funding seriously. To this end, the Bush administration has introduced reform legislation that requires companies to better fund their underfunded plans, limit PBGC's exposure for new benefit increases made by underfunded plans and improves PBGC's and pensioners' recoveries if underfunded plans are terminated.
 The LTV pension problem dates back to July 1986 when the company filed for bankruptcy. At the time, LTV had four pension plans insured by PBGC. One, the Republic Salaried Plan, ran out of money shortly after the filing, requiring PBGC to take it over. The remaining three plans were terminated in January 1987 to protect the insurance fund from an even larger loss then it already faced.
 Because of limits on PBGC's guarantee, the benefits of some LTV retirees were reduced. LTV agreed with the Steelworkers' union to make up most of the reduction. The "follow-on" plans abused the pension insurance program by eliminating one of the few coinsurance features of the program. Without it, employers would find it easier to terminate their underfunded plans and shift the burden to PBGC.
 When LTV refused to end the follow-on plans, PBGC ordered LTV to resume responsibility for the three plans terminated in 1987. After a protracted legal battle, in June 1990 the U.S. Supreme Court, in an 8-1 decision, upheld PBGC's authority to restore the plans to LTV.
 PBGC is a federal agency created by the Employee Retirement Income Security Act to guarantee payment of basic retirement benefits earned by American workers participating in private defined benefit pension plans. PBGC administers two insurance programs, which cover nearly 40 million workers in about 85,000 pension plans.
 -0- 2/14/92
 /CONTACT: Judith E. Bekelman, director, communications & public affairs, or Andy Gasparich, public affairs specialist, both of the Pension Benefit Guaranty Corporation, 202-778-8840, /
 (QLTV) CO: LTV Corporation; Pension Benefit Guaranty Corporation ST: District of Columbia IN: SU:


TW-MH -- DC011 -- 0191 02/14/92 12:09 EST
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Date:Feb 14, 1992
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