Post-Petition Benefits Are Ch. 11 Admin Claims: 3rd Circ.

Law360, New York (June 16, 2011, 7:52 PM EDT) -- In a precedential ruling on Thursday, the Third Circuit said Chapter 11 debtors that withdraw from multiemployer pension funds were required to classify employee benefits tied to post-petition work as administrative expenses.

In a case of first impression, the appeals court found that paper manufacturer Marcal Paper Mills Inc. improperly designated a $5.8 million liability for unfunded pension benefits as a general unsecured claim, and that a district court correctly reversed in favor of the multiemployer fund, granting administrative priority to the post-petition portion of the...
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