Effective Negotiation and Contracting Mitigates ERISA-Regulated Pension Withdrawal Liability
SITUATION: Lawrence Kamin represented the owner of a large business in the contractual sale of the entity to a sizable buyer. The seller was a member of a multi-employer liability pension plan regulated by ERISA, which poses risk for automatic and immediate “withdrawal liability” to the seller if not appropriately mitigated in the contractual process.
STRATEGY: Our business attorneys identified this often overlooked liability issue early on. We effectively negotiated with the purchaser and documented the incorporation of statutory language and mechanisms required by the statute into the sale contract to ensure that future pension liability would reside with the buyer.
RESULT: Lawrence Kamin minimized the potential for post-closing liability for our client and enabled our client to shift substantial future costs to the purchaser.