Controlled Group and Successor Liability for Defined Benefit Pension Plan Liabilities: Best Practices and Potential Pitfalls for M&A Lawyers

This CLE course will provide M&A and in-house counsel with a review of controlled group rules and successor liability theories. An entity can be held jointly and severally liable for the unpaid or underfunded pension liabilities of another entity.

Pension liabilities are not just an obligation of the company that sponsors or contributes to a plan; certain liabilities are also the responsibility of the employer’s “controlled group,” which comprises trades or businesses under common control with the employer. For this reason, it is important that practitioners, including M&A and in-house counsel, understand the controlled group rules. It is critical to raise potential controlled group issues early on in a deal making process.

In addition to the controlled group, multiemployer pension plans and PBGC may also look to unrelated entities who purchase the assets of employers under the theory of “successor liability”. Because some courts have applied successor liability in certain circumstances, the normal rule that an asset purchaser is not responsible for the debts of the seller does not necessarily apply.

Listen as our experienced panel of ERISA attorneys guides you through the controlled group and successor liability rules.