29 U.S.C. § 1369

Treatment of transactions to evade liability; effect of corporate reorganization

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(a) Treatment of transactions to evade liability

If a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject under this subtitle and the transaction becomes effective within five years before the termination date of the termination on which such liability would be based, then such person and the members of such person’s controlled group (determined as of the termination date) shall be subject to liability under this subtitle in connection with such termination as if such person were a contributing sponsor of the terminated plan as of the termination date. This subsection shall not cause any person to be liable under this subtitle in connection with such plan termination for any increases or improvements in the benefits provided under the plan which are adopted after the date on which the transaction referred to in the preceding sentence becomes effective.

(b) Effect of corporate reorganizationFor purposes of this subtitle, the following rules apply in the case of certain corporate reorganizations:(1) Change of identity, form, etc.

If a person ceases to exist by reason of a reorganization which involves a mere change in identity, form, or place of organization, however effected, a successor corporation resulting from such reorganization shall be treated as the person to whom this subtitle applies.

(2) Liquidation into parent corporation

If a person ceases to exist by reason of liquidation into a parent corporation, the parent corporation shall be treated as the person to whom this subtitle applies.

(3) Merger, consolidation, or division

If a person ceases to exist by reason of a merger, consolidation, or division, the successor corporation or corporations shall be treated as the person to whom this subtitle applies.

(Pub. L. 93–406, title IV, § 4069, as added Pub. L. 99–272, title XI, § 11013(a), Apr. 7, 1986, 100 Stat. 260.)Statutory Notes and Related SubsidiariesEffective Date

Pub. L. 99–272, title XI, § 11013(b), Apr. 7, 1986, 100 Stat. 261, provided that: “Section 4069(a) of the Employee Retirement Income Security Act of 1974 (as added by subsection (a)) [subsec. (a) of this section] shall apply with respect to transactions becoming effective on or after January 1, 1986.”

Section effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99–272, set out as an Effective Date of 1986 Amendment note under section 1341 of this title.

Notes of Decisions

Cited in 19 cases (1 in the last 5 years), 1988–2022 · leading case: Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., C/o Ct Corp. Sys. Registered Agent, 998 F.2d 1192 (3rd Cir. 1993).

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Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., C/o Ct Corp. Sys. Registered Agent, 998 F.2d 1192 (3rd Cir. 1993). · cites it 7× “We hold that the PBGC has stated a legally sufficient claim under 29 U.S.C. § 1369 (1988). Section 1369’s requirement that a transaction “become[ ] effective” within five years of the plan termination is met because a transaction does not take effect until the previous plan…”

Pension Benefit Guar. Corp. v. Findlay Indus., Inc., 902 F.3d 597 (6th Cir. 2018). · cites it 4× “The statute then guarantees that a liable sponsor cannot evade its responsibility through tactics such as corporate reorganization, see 29 U.S.C. § 1369 (b), or sales to avoid liability for an impending plan termination, see 29 U.”

Durango-Georgia Paper Co. v. H.G. Est., LLC, 739 F.3d 1263 (11th Cir. 2014). · cites it 8× “Corporation were jointly and severally liable with the PAPER COMPANY under 29 U.S.C. § 1369 as members of the former controlled group.”

Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., C/o Ct Corp. Sys. Registered Agent, 215 F.3d 407 (3rd Cir. 2000). · cites it 5× “3 Procedural History PBGC filed a complaint to recover the unfunded obligations from WCI under two theories: predecessor liability under 29 U.S.C. § 1369 and as a sham transaction under 29 U.”

Hop Energy, L.L.C. v. Local 553 Pension Fund, 678 F.3d 158 (2d Cir. 2012). · cites it 2× “1988); see also 29 U.S.C. § 1369 (a) (imposing liability where "a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject" under the MPPAA).”

Bowers v. Andrew Weir Shipping, Ltd., 810 F. Supp. 522 (S.D.N.Y. 1992). · cites it 5× “porate Reorganization Provision Section 1398 of the MPPAA provides an exemption from withdrawal liability under certain circumstances: Notwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan solely because— (1) an…”

In Re Doskocil Companies Inc., 130 B.R. 858 (Bankr. D. Kan. 1991). · cites it 6× “The PBGC contends that alleged acts by the debtor in regard to Cornbelt and Cedar Rapids since 1986 constitute “transactions” within the meaning of ERISA § 4069(a), 29 U.S.C. § 1369 (a); *862 therefore, the debtor is liable to the PBGC under this section as well.”

Adams v. Pension Benefit Guar. Corp., 332 F. Supp. 2d 231 (D.D.C. 2004). · cites it 2× “The plaintiffs’ First Amended Complaint asserts three claims for relief: (1) that termination of the Pilots’ A-Plan under the CSA was a transaction to evade liability and thus, Pichin and the Icahn entities are in violation of ERISA § 4069, 29 U.S.C. § 1369 ; (2) that Pichin, as…”

Bowers v. Andrew Weir Shipping, Ltd., 27 F.3d 800 (2d Cir. 1994). · cites it 3× “Section 1398 of the MPPAA provides an exemption from withdrawal liability only under certain circumstances: Notwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan solely because— (1) an employer ceases to exist by…”

Centra, Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 578 F.3d 592 (7th Cir. 2009). “” 29 U.S.C. § 1369 (b)(3). Taken together, §§ 1398 and 1369(b) specify that an employer does not “withdraw” from a plan solely because it undergoes a merger, consolidation, or division (terms that are, unfortunately, undefined).”

In Re Consol. Litig. Concerning Int'l Harvester's Disposition of Wisconsin Steel, 681 F. Supp. 512 (N.D. Ill. 1988). “29 U.S.C. § 1369 (a). The section expressly applies only to transactions with effective dates on or after January 1, 1986.”

Blaw Knox Ret. Income Plan v. White Consol. Indus., Inc., 998 F.2d 1185 (3rd Cir. 1993). · cites it 4× “§ 1362 , and a transaction to evade liability under section 4069, 29 U.S.C. § 1369 . WCI filed a motion to dismiss all five counts of the complaint and a motion for summary judgment on Counts I, II, and III.”

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