The National Retirement Fund and The Board of Trustees of The National…

Background

The National Retirement Fund and its Board of Trustees sponsor and administer a multiemployer pension plan known as the Legacy Plan, which is governed by the Employee Retirement Income Security Act of 1974 (ERISA). Pioneer Aerospace Corporation participated in the plan. The complaint alleges that Pioneer was a wholly owned subsidiary of Safran USA as of February 2018 and that Safran USA later sold Pioneer to Aviation Safety Resources, Inc.

Pioneer filed for Chapter 11 bankruptcy protection in November 2023 and withdrew from the Fund that month. Plaintiffs allege that Safran USA sold Pioneer with the principal purpose of avoiding withdrawal liability. Safran USA did not make two withdrawal-liability installment payments due in August and November 2024. Plaintiffs also allege that Defendants failed to respond to certain information requests. Plaintiffs therefore claimed that Defendants had defaulted and that the Fund could demand immediate payment of the remaining withdrawal liability, interest, liquidated damages, attorneys’ fees, and costs.

Defendants demanded arbitration of the withdrawal-liability dispute. Arbitration began on March 25, 2025. Although Defendants had previously suggested that the lawsuit should be stayed, the parties proceeded with discovery in both matters. After fact discovery had been extended once, Defendants asked the court to stay the lawsuit while arbitration was pending. Plaintiffs opposed the request.

Parties’ positions and issues

Defendants argued that the court could not resolve the amount owed because the arbitrator had to decide the underlying liability issues. Plaintiffs argued that a stay would improperly allow Defendants to avoid paying accelerated withdrawal liability and related damages while the arbitration continued.

The court identified two questions: whether Plaintiffs could accelerate the full amount allegedly due based on a default, and whether Plaintiffs could pursue that demand in court despite the pending arbitration. The parties agreed that Defendants could challenge the withdrawal-liability assessment and the identity of the parties responsible for payment in arbitration. The court also noted the parties’ agreement that, at the time of their submissions, Defendants were current on installment payments, although Plaintiffs disputed how many installments had been timely paid.

Legal framework

The court explained that ERISA generally requires an employer to make withdrawal-liability payments before disputing the assessment. The statute requires payments to continue despite a request for review or an appeal, and it requires disputes concerning specified withdrawal-liability provisions to be resolved through arbitration.

ERISA also permits a plan sponsor to demand immediate payment of the outstanding withdrawal liability and interest after a default. A default may include an event defined in the plan’s rules that indicates a substantial likelihood that the employer will be unable to pay its withdrawal liability. The court relied on decisions holding that a plan may seek interim acceleration during arbitration without deciding the ultimate merits of the liability dispute.

Analysis

The court found that the complaint adequately alleged a qualifying default at this stage of the case. The relevant Trust Agreement defined a qualifying default to include an employer’s failure, without reasonable explanation, to provide information requested under ERISA. Plaintiffs alleged that Safran USA did not respond to the Fund’s information requests while making requests of its own.

The court concluded that these allegations supplied a legal and factual basis for seeking accelerated withdrawal liability and related fees and costs. It emphasized that the arbitrator would still decide whether the alleged default and acceleration were ultimately proper. The court did not enter judgment for Plaintiffs or finally determine the amount of withdrawal liability, interest, liquidated damages, attorneys’ fees, or costs owed.

Disposition

The court denied Defendants’ motion for a stay. It stated that staying the litigation would undermine ERISA’s “pay now, dispute later” framework. The court also set deadlines for any party seeking to move for summary judgment to submit a pre-motion letter. The opinion states that Plaintiffs had not yet moved for an interim payment order but anticipated doing so.