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August 2013 Archives

Getting Employed & Getting Paid in Bankruptcy Cases

Join us for a white-linen lunch and this wonderful program:

Getting Employed and Getting Paid in Bankruptcy Cases

Tips for Effectively Negotiating the Employment and Fee Application Processes


Lynette Kelly
U.S. Trustee’s OfficeChristopher D. Sullivan
Greenfield, Sullivan, Draa & Harrington LLPMichael G. Kasolas, CPA
Chapter 7 Panel Trustee, OaklandBill Brinkman
Jigsaw Advisors, LLC


Scott H. McNutt
McNutt Law Group LLP

Time & Location

Noon to 1:30 pm Le Meridien Hotel
333 Battery Street
San Francisco, CA


• How to get employed and get your fees approved in an efficient, stress-free way
• How to guide other professionals in the case through the process
• A discussion of the Northern District’s treatment of employment and fee applications
• New U.S. Trustee guidelines regarding fee applications in large casesSection Chair: Reno Fernandez, Macdonald Fernandez LLP 
Barristers Section Chair: Benjamin Uy, Jr., Pillsbury Winthrop Shaw Pittman LLP

Contractor's Withdrawal Liability for Unpaid Pension Contributions Dischargeable in Bankruptcy

In Carpenters Pension Trust Fund for Northern California v. Moxley13 C.D.O.S. 9503, No. 11-16133 (9th Cir. August 20, 2013), the United States Court of Appeals for the Ninth Circuit ruled that a construction contractor's withdrawal liability for unpaid pension fund contributions is dischargeable in bankruptcy.

Contractors who stop working under collective bargaining agreements but stay in business must continue to fund the amount necessary to ensure payment to vested pension beneficiaries under ERISA.  29 U.S.C. §§ 1381, 1391.  In this case, Michael Moxley's obligations under a California carpenters multiemployer collective bargaining agreement lapsed but he continued in business without making pension contributions.  He filed bankruptcy owing the pension fund more than $170,000, and the fund brought an adversary proceeding to except it's claim from Moxley's discharge under Bankruptcy Code Section 523(a)(4).

Section 523(a)(4) excepts from discharge "any debt . . . for fraud or defalcation while acting in a fiduciary capacity . . ."  Although the pension fund is arguably a trust, the court determined that Moxley did not act in a fiduciary capacity with respect to the fund because, among other things:  (1) he did not administer the fund; and (2) the unpaid funds did not become an asset of the pension fund.

Section 523(a)(4) issues frequently arise in contractor cases, and this opinion should provide a valuable tool in determining how pension obligations are treated.

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