This article explores the significant impact a recent decision by the U.S. Court of Appeals for the Third Circuit will have in altering the already complex landscape of bankruptcy proceedings involving withdrawal liability. In In re Marcal Paper Mills Inc., No. 09-4574, 2011 U.S. App. LEXIS 12109 (3d Cir. July 16, 2011), the Third Circuit, the first Court of Appeals to do so, held that a claim against a debtor for post-petition withdrawal liability is entitled to treatment as an administrative expense entitled to priority of payment under the Bankruptcy Code. This article discusses how this novel case—which contradicts rulings by other courts relating to withdrawal liability—will impact bankruptcy planning in a myriad of ways.
Nature of Withdrawal Liability
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