April 3, 2020 Introduction An asset buyer of a business generally can select which seller liabilities the buyer will assume. One significant exception is the risk, when buying assets of a union business, that the seller’s underfunded union pension plan…
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Bankruptcy Court Permits 363(f) Sale of Business Free of Pension Claim
Introduction A pension plan unsuccessfully tried to stop a company from selling a business to a buyer in a 363(f) (3) sale free and clear of the seller’s pension fund liability. The deal The seller was engaged in environmental and…
Posted in asset purchase agreement, bankruptcy sale, distressed business acquisitions, federal multiemployer pension plan withdrawal liability, Section 363 sale, successor liability Tagged with: 363(f) sale, alter ego, contingent liability, multiemployer pension plan withdrawal liability, successor liability, transferee liability
Buyer’s purchase price may triple post-closing because of underfunded union pension plan
Seller was a wire-forming company. A collective bargaining agreement with the union representing its workforce obligated Seller to contribute to a multiemployer pension plan on behalf of the employees. In September 2013, after Seller determined that it could not stay…
Court finds that buyer of a California union skilled nursing facility had no constructive knowledge of seller’s multi-employer pension plan withdrawal liability
This is a follow up to a discussion of an earlier June court decision involving the same business buyer. http://www.mk-law.com/wpblog/buyer-of-a-california-union-skilled-nursing-facility-faces-multi-employer-pension-plan-withdrawal-liability-if-buyer-had-constructive-knowledge-of-the-potential-liability/ Buyer purchased a 99-bed skilled nursing facility located Santa Clarita, California from Seller through an asset purchase agreement that closed…
Court finds a buyer of assets of a Maui hotel with union employees liable for the seller’s unfunded pension plan liability
A federal court of appeals recently held that the buyer of the assets of a hotel was required to pay seller’s unfunded union pension liability to its multiemployer pension plan. The buyer, a private equity group, entered into a purchase…
Asset buyer of electrical contractor business may have liability for seller’s multiemployer pension plan withdrawal charges
The buyer in this case may end up being stuck with a liability of the seller, that the buyer did not assume in the asset purchase agreement, that is 2.5 times the amount the buyer paid the seller for the…
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