Bankruptcy and Employee Benefit Plans: Harmonizing Conflicting Requirements That Cannot All Be Implemented

Unfunded pension plan liability and other benefits issues are often the precipitating factors that drive a company into bankruptcy where debtors will have to decide whether to continue or terminate benefit plans, with all the attendant consequences. Navigating employee benefits issues in bankruptcy frequently turns on whether the Bankruptcy Code or ERISA is the controlling law.

In certain situations, the Bankruptcy Code will actually override ERISA. In other situations, ERISA and the Bankruptcy Code can be harmonized, and in still other situations, which law trumps the other remains open to debate. For example, bankruptcy courts may choose to determine pension plan withdrawal liability as part of the claims allowance process notwithstanding alternative dispute resolution mechanisms required by ERISA. And how to calculate claims of the Pension Benefit Guaranty Corp. has long been subject to confusion, debate, and challenge.

Health and welfare plans cannot be ignored. These may be of particular concern when the debtor provides retiree medical benefits.

Listen as our expert panel of bankruptcy and employee benefits lawyers discusses navigating the intersection of bankruptcy and employee benefits law whether the employer intends to reorganize or sell assets, and issues of concern to individual debtors.