Jurisdiction Over "Removal Of Ownership Rights" (Part III)

David M. Strauss
Executive Director, Pension Benefit Guaranty Corporation (Penny Benny)
Secretary Of Labor

Dear Mr. Strauss,

Pursuant to the Pension Reform Act of 1974, I have several questions about my IRA. The situation is as follows:

In the late 1980's and early 1990's, I worked for a bank and became vested in their retirement plan. Since that time, I have become self employed. When I left the bank, the pension plan was required to be converted to an IRA.

During 1998, part of the assets of my pension where used to buy 100 shares of Boston CHICKEN. After the acquisition, I heard a news report on CNBC. Then, I tried to verify the information though Yahoo's Reuters News Service -- Boston CHICKEN's management had decided that instead of trying to be profitable they were going to do away with my ownership. Could this be true? I had always assumed that a publicly traded corporation had the duty to pursue profits for the owners.

Since I had not been notified of "anything" by Boston CHICKEN, on Nov. 12, 1998 I wrote to Lawrence White, CFO of Boston CHICKEN. Can you tell me if he is saying that the company will convert debt securities to equity ownership... with the effect of either diluting or eliminating my equity interest in the company?


"As stated in our most resent public statement (Press Release dated 11/6/98), as part of our Chapter 11 reorganization, we are working to reduce our current debt of over $900 million by nearly two-thirds. We hope to exchange our three issues of subordinated convertible debentures (three publicly traded bonds), totaling approx. $627 million for equity. The Creditor Committee, consisting primarily of bondholders, has indicated it is willing to exchange the convertible subordinated debentures and certain other unsecured debt for all of the equity in the reorganized company. Although the company is exploring opportunities to preserve some value for existing stockholders, there can be no assurance that existing stockholders will retain any value.

If you still have additional questions, please call our toll-free investor information line at 800-480-5010, or refer to our web site at www.bostonchicken.com."

---------------------- Forwarded by Lawrence White/Support Center/Boston Chicken on 11/12/98 10:59 AM ---------------------------

End Quote

Therefore, I seek your guidance in answering the following questions:

  1. To your knowledge, is this legally permissible?
  2. Do I have any rights to exercise as a stockholder under these conditions to preserve my equity interest in the company?
  3. Do I have the only retirement plan to be effected by this travesty?
  4. What quasi-governmental agency covers "raids on pension plan assets"?
  5. Are there any separate bankruptcy reforms that would allow PBGC to sit on the creditors' committee?
  6. If Boston CHICKEN removes pension assets, and later I am unable to fund promised benefits, will the Pension Benefit Guaranty Corporation cover me?

Thank you. I shall await your advice.


cc Robert E. Rubin, Secretary of the Treasury Dept.
William Daley, Secretary Of Commerce
Lawrence White, CFO of Boston CHICKEN

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