Retirees’ Bankruptcy Protection Act Trumps ERISA, 3rd Circuit Rules
July 16th, 2010
In a huge win for labor, the 3rd Circuit has ruled that a corporation in bankruptcy cannot terminate its retirees’ health and life insurance benefits — even if its ERISA plan explicitly reserved its right to unilaterally terminate such benefits — unless it can show that doing so is a necessary part of its reorganization plan. The decision promises to alter the playing field in big corporate bankruptcies by mandating compliance with Section 1114 of the Retiree Benefits Bankruptcy Protection Act without exception.
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Retirees’ Bankruptcy Protection Act Trumps ERISA, 3rd Circuit Rules