In a significant development for Tupperware Brands Corporation's ongoing liquidation, the U.S. Bankruptcy Court for the District of Delaware has approved a modified plan to address the company's retiree benefits obligations. The order, entered on May 6, 2025, authorizes Tupperware to establish a $275,000 settlement fund to continue providing health benefits to approximately 230 retirees until the funds are exhausted, replacing the company's earlier proposal to terminate all benefits by June 30, 2025.
The ruling comes as Tupperware moves through the final stages of its Chapter 11 bankruptcy process, having already sold substantially all of its assets to Party Products LLC and its affiliates (referred to as "NewCo") in November 2024. The company filed for bankruptcy protection in September 2024 and is no longer an operating business with employees.
"The Debtors have sold substantially all of their assets, are no longer operating, and have no ability to continue paying retiree benefits," Tupperware stated in its original motion. The company successfully argued that modifying retiree benefits was necessary to permit confirmation of its liquidation plan, which had already received overwhelming creditor support with a 96.4% acceptance rate from general unsecured creditors.
Under Section 1114 of the Bankruptcy Code, companies in Chapter 11 must typically continue paying retiree benefits unless they can reach an agreement with an authorized representative of retirees or convince the court that modification is necessary for reorganization and is equitable. In this case, Tupperware initially sought to continue benefits through June 30, 2025, but reached a settlement with the Retiree Committee for the $275,000 fund after negotiations.
The settlement specifically addresses Tupperware's "Over-65 Retiree Benefit Plan," which provides health-related reimbursements to former employees over age 65. The company will deposit the settlement funds with Via Benefits, which will continue to administer monthly payments until the funds are depleted. The amount will be reduced dollar-for-dollar by any expenditures Tupperware makes on the plan after May 14, 2025.
The court also approved payment of up to $75,000 for the Retiree Committee's professional fees and included the committee and its professionals as Released Parties and Releasing Parties in Tupperware's liquidation plan.
"Implementation of the proposal is necessary in furtherance of confirmation of the Debtors' Plan," Tupperware argued in its motion. The company noted that it had engaged in good faith negotiations with the Retiree Committee, but that "it is unavoidable that any remaining programs will be terminated, whether inside or outside of chapter 11."
The resolution marks a significant milestone in Tupperware's bankruptcy process, balancing the interests of retirees with the practical limitations of a company in liquidation. Unlike traditional Chapter 11 cases aimed at reorganization, Tupperware's case involves an orderly wind-down following the sale of its iconic food storage container business and other assets.
Tupperware Brands Corporation and eight affiliated entities filed for Chapter 11 protection in Delaware bankruptcy court (Case No. 24-12156) and are represented by Cole Schotz P.C. and Kirkland & Ellis LLP.
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