KEENE, NH – This week a U.S. district court found that C&S Wholesale Grocers may be liable for more than $58 million in pension obligations—the result of a nearly decade-old acquisition deal.
According to news source Bloomberg, the court issued a ruling in response to a lawsuit from the Teamsters union pension fund. Senior Judge Frederick J. Scullin Jr. found that the wholesaler could be considered liable for multiemployer pension plan obligations picked up as part of the 2008 purchase of Syracuse, New York-based food retail company Penn Traffic Co.—despite the fact that Penn Traffic continued to exist as a company after the acquisition and after going through bankruptcy proceedings.
Union representatives also accused C&S of illegally structuring its takeover of Penn Traffic to evade pension withdrawal liability. But Judge Scullin rejected that claim, noting that Penn Traffic later paid more than $5 million in assessed withdrawal liability.
The court rejected the union’s claim that C&S and Penn Traffic may have shared joint employer liability, instead allowing the union to move forward with its suit on the grounds that C&S had accepted successor liability in the course of its acquisition.
AndKnowUKnow will continue to report—with updates on this and other important situations developing in the produce industry.