Third Circuit Holds that a Portion of Post-Petition Withdrawal Liability in Bankruptcy Is Entitled to Priority Over General Unsecured Claims

more+
less-

Recently, the Third Circuit held that withdrawal liability triggered after a bankruptcy filing date may be apportioned to pre- and post-petition service for the debtor, and that the withdrawal liability attributable to post-petition service may be entitled to priority over general unsecured claims under the Bankruptcy Code. Employers that participate in a multiemployer pension plan should determine the claims impact of withdrawal in light of this court decision and also assess whether filing for bankruptcy protection outside of the Third Circuit is appropriate.

The U.S. Court of Appeals for the Third Circuit recently held in In re Marcal Papers Mills, Inc. that withdrawal liability triggered after the bankruptcy filing date may be apportioned to pre- and post-petition liabilities attributable to pre- and post-petition service with the amount of withdrawal liability attributable to post-petition service treated as an administrative expense entitled to priority over general unsecured claims under the Bankruptcy Code.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Finance & Banking Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDermott Will & Emery | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »