Retired employes of the old Kann's department stores can breathe easier now: Their pensions will be restored.
Last month 200 retirees were informed by L.S. Good Co., the West Virginia store chain that took over Kann's in 1971 and closed the stores four years later, that the new owner was bankrupt and no longer could pay their benefits.
The pensioners, many of whom are in their 70s and 80s with as much as 55 years of service to Kann's, received their last checks in April.
Re-enter S. Kann Sons Co., which founded the retail business before the turn of the century. One store was in downtown Washington, another in Virginia. Now an investment company, S. Kann Sons notified its former employes this week it will take over payment of their benefits.
An act of paternalism? "Hell, no!" said B. Bernei Burgunder Jr., a nephew of the stores' former president Sol Kann. "These people earned it."
Kann's pension plan was a voluntary deferred compensation program to which the workers did not contribute. In effect, the company promised to take care of them out of the goodness of its heart.
Because it was not a defined benefits plan, the beneficiaries were not eligible to receive payments from the Pension Benefit Guaranty Corp., the government agency that insures pensions. So, with L.S. Good Co. seeking protection from creditors while in bankruptcy reorganization, the pensioners would have been out of luck -- at least temporarily -- if their former employer had not come forward.
Burgunder claims that Kann's got a legal commitment from Good's at the time of sale to pay benefits to retirees and those eligible for retirement. The sale price was lowered by $1.5 million in return for Good's accepting all Kann's liabilities, including the pension payments, he added.
L.S. Good Co. did not return a reporter's phone calls.