On August 20, in Carpenters Pension Trust Fund for Northern California v. Moxley, — F.3d — (9th Cir. 2013), the U.S. Court of Appeals for the Ninth Circuit affirmed the decisions of the U.S. District Court for the Northern District of California and the U.S. Bankruptcy Court for the Northern District of California, both of which had held that an individual could properly receive a bankruptcy discharge for "withdrawal liability" owed to a pension fund under the Employee Retirement Income Security Act (ERISA). In its decision, the court of appeals found that the pension fund could not establish that the debtor was a fiduciary of the fund. As such, the pension fund was unable to make its case of nondischargeability under Section 523(a)(4) of the Bankruptcy Code.
The Bankruptcy Court Action
The debtor, Michael G. Moxley, was a sole proprietor conducting business as "MGM's Cabinet Installation Service." In connection with that business, Moxley signed on to a multiemployer collective bargaining agreement pursuant to which he was required to make contributions to the Carpenters Pension Trust Fund for Northern California. When the collective bargaining agreement expired in 2004, Moxley stopped making contributions to the fund, but continued to operate his carpentry business.
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