FIDUCIARY/PENSIONS ALERT: Post-Petition Retirement Benefits Constitute Administrative Claims
June 16, 2011 - Third Circuit, New Jersey. As a matter of first impression, the court ruled that Chapter 11 debtors in a bankruptcy proceeding that withdraw from multiemployer pension funds are required to classify employee benefits associated with post-petition work as administrative expenses. Reconciling ERISA and bankruptcy law, the court determined that the employer improperly designated millions of dollars in liability for unfunded pension benefits as a general unsecured claim.
In re Marcal Paper Mills, Inc., No. 09-4574.