The opinion of the court was delivered by: HOLDERMAN
JAMES F. HOLDERMAN, UNITED STATES DISTRICT JUDGE
The Pension Benefit Guaranty Corporation ("PBGC") brought this action against defendant Artra Group, Inc. ("Artra") under Title IV of the Employee Retirement Income Security Act of 1974 ("ERISA") claiming that Artra is liable to PBGC as the sponsor of a terminated, underfunded single-employer pension plan.
The material facts are not in dispute. Plaintiff PBGC is a wholly-owned United States Government corporation created by 29 U.S.C. § 1302(a) to administer the pension plan termination insurance program established under Title IV of ERISA. Artra is a corporation organized under the laws of Pennsylvania with its principal place of business located in Northfield, Illinois. Artra was known as Dutch Boy, Inc. until it changed its name to Artra on or about December 31, 1980.
On or about June 1, 1971, the Local 1139 UE Group Pension Plan (the "UE Plan") was established to provide retirement benefits to employees of employers who entered into collective bargaining agreements with the United Electrical, Radio and Machine Workers of America (the "Union"). On or about March 17, 1978, Dutch Boy entered into a participation agreement with Local 187 of the Union whereby Dutch Boy became a participating employer in the UE Plan effective January 1, 1978. The Participation Agreement incorporates the UE Plan, making the UE Plan part of the Participation Agreement.
Before Dutch Boy became a participating employer in the UE Plan, the Secretary of the Treasury, through the Internal Revenue Service (the "IRS"), determined the UE Plan to be qualified under section 401(a) of the Internal Revenue Code, 26 U.S.C. § 401(a) (hereinafter "section 401(a)"). Favorable determination letters were issued by the IRS on May 24, 1973 and September 1, 1977. After Dutch Boy became a participating employer in the UE Plan, the UE Plan once again requested an IRS qualification letter for the UE Plan. In response, the IRS issued a favorable determination letter on June 11, 1980.
On October 31, 1980, Dutch Boy ceased operations at the Chicago plant where the participating employees were employed. The alleged Dutch Boy Plan was terminated effective December 14, 1980 and PBGC was appointed trustee of the Dutch Boy Plan.
On May 19, 1987, Artra was informed by PBGC that PBGC had determined that Artra was the sponsor of a single-employer pension plan that was underfunded by $ 27,446.00 as of December 14, 1980, the date the Dutch Boy Plan was terminated. PBGC requested payment of that amount under sections 4062 and 4068 of ERISA, 29 U.S.C. §§ 1362, 1368, plus interest from April 2, 1981.
On February 26, 1990, Artra appealed the determination of liability to PBGC's Appeals Board. On December 6, 1990, the Appeals Board issued a decision finding no basis for changing the PBGC's initial determination, except that the amount of the liability was reduced to $ 21,783.00.
The parties agree that there are two issues at the center of this dispute. The first issue is whether the Appeals Board correctly determined that the UE Plan was an aggregate of single-employer plans or whether, contrary to the Appeals Board's decision, the UE Plan was one multiemployer plan. If the UE Plan was one multiemployer plan, it is undisputed that Artra has no liability to PBGC. The second issue is whether the Appeals Board correctly determined that the Dutch Boy Plan was covered by Title IV of ERISA. If the Dutch Boy Plan was not covered by Title IV, it is ...