Controlled Group Liability and Successor Employer Rules After PBGC v. Findlay Industries Inc.

ERISA and Internal Revenue Code Provisions; Limiting Claims and Reducing Risk of Seller's Liability

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, March 5, 2019

Recorded event now available

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Program Materials

This CLE webinar will provide benefits counsel, advisers and plan administrators guidance on the requirements and limitations of the controlled group liability and successor employer rules under ERISA and the Internal Revenue Code (IRC). The panel will provide an analysis of key provisions under ERISA and the IRC impacting controlled group and successor liability, guidance from recent cases, and methods to limit claims and reduce the risk of seller's liability.

Description

Pension funding obligations are not limited to the immediate employer and sponsor of a pension plan. Third parties can now have pension liability as members of a controlled group or as a successor in an asset deal. The U.S. Court of Appeals for the Sixth Circuit’s decision in PBGC v. Findlay Industries Inc. and a recent decision by the U.S. Court of Appeals for the Ninth Circuit in Heavenly Hana Hotels v. Hotel Union & Hotel Industry of Hawaii Pension Plan, confirm that this liability exposure may exist where you least expect it. Employers, investors, shareholders, and lenders must carefully analyze the controlled group liability and successor employer rules under ERISA and the Internal Revenue Code (IRC) and effectively implement strategies to minimize the dangers of pension liability.

ERISA provides that employees of a "trade or business" under the common control with another entity are treated as if they are employed by a single employer resulting in joint and several liability when the single-employer pension plan is terminated or an entity withdraws from a multiemployer pension plan.

In addition to controlled group liability, courts have imposed successor liability on a buyer in an asset deal where the buyer had actual or even constructive notice of the pension plan liabilities before the sale and continues the operations of the seller. The majority of those cases have involved actions by multi-employer pension plans to collect withdrawal liability from unrelated third parties. This analysis of successor liability could also become more prevalent in the single-employer plan context.

Listen as our panel discusses the impact of the Sixth Circuit's decision in PBGC v. Findlay Industries Inc., et al., essential rules under ERISA and the IRC for controlled group and successor liability, and methods to limit claims and reduce the risk of liability.

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Outline

  1. The impact of the Sixth Circuit's decision in PBGC v. Findlay Industries Inc., and other significant cases.
  2. Controlled group liability: ufunded pension liability and PBGC claims, plan withdrawal liability, and more
  3. Successor liability under common law, ERISA and the IRC
  4. Best practices in minimizing liability in buyer asset purchase deals

Benefits

The panel will review these and other key issues:

  • Controlled group liability litigation claims  by multi-employer plans and the PBGC, including claims against entities outside the U.S.
  • Determining what constitutes a "controlled group" and "trades or businesses" after PBGC v. Findlay Industries Inc., et al.
  • Expanded standards of successor liability and methods to limit them
  • Minimizing successor liability for the seller's plan liabilities in buyer's asset purchase deals

Faculty

Buckmann, Carol
Carol I. Buckmann

Partner
Cohen & Buckmann

Ms. Buckmann has advised global employers on U.S. and cross-border employee benefit matters for over 35 years....  |  Read More

Cohen, Sandra
Sandra W. Cohen

Partner
Cohen & Buckmann

Ms. Cohen is one of the leading executive compensation attorneys in North America. Clients and other attorneys seek her...  |  Read More

Hirsh, Leonard
Leonard S. Hirsh

Partner
Cohen & Buckmann

Mr. Hirsh is a partner of our firm and is a well-known employee benefits and compensation attorney. He advises clients...  |  Read More

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