Pension Benefit Guaranty Corp. v. 50509 Marine LLC, No. 19-14968 (11th Cir. 2020)Annotate this Case
The Eleventh Circuit held that, in the unusual circumstances of this case, Liberty still existed in 2012 sufficiently to act as the employee pension plan's sponsor under the Employee Retirement Income Security Act (ERISA). In this case, Liberty was an Illinois corporation that went bankrupt and dissolved under state law in the 1990s.
The court followed the Supreme Court's instruction to fill in ERISA's gaps with common-law rules, and held that where the sponsor of an ERISA plan dissolves under state law but continues to authorize payments to beneficiaries and is not supplanted as the plan's sponsor by another entity, it remains the constructive sponsor such that other members of its controlled group may be held liable for the plan's termination liabilities. Under this narrow rule, the court held that the Companies are liable to PBGC for the Plan's termination liabilities for the simple reason that Liberty persisted as the Plan's sponsor even as it dissolved as an Illinois corporation.