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CENTRAL STATES

May 7, 1993

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff, Counterdefendant, and HOWARD McDOUGALL, Trustee, Plaintiff,
v.
BELL TRANSIT COMPANY, a Delaware corporation, Defendant, Counterplaintiff.



The opinion of the court was delivered by: WILLIAM T. HART

 Plaintiffs Central States, Southeast and Southwest Areas Pension Fund (the "Fund") and one of its trustees brought this action against defendant Bell Transit Company ("Bell"), which formerly had employees who are participants in the Fund. Count I is a claim for withdrawal liability under the Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. § 1001 et seq. In Count II, plaintiffs seek to vacate an arbitration award finding that defendant had not incurred withdrawal liability. In a counterclaim against the Fund, Bell seeks a refund of interim payments of withdrawal liability made while the arbitration proceeding was pending. Presently pending are cross-motions for summary judgment. Plaintiffs move for summary judgment on Count II. Defendant moves for summary judgment dismissing plaintiffs' entire complaint and awarding relief on defendant's counterclaim. *fn1"

 The material facts of this case are not in dispute. Prior to May 1, 1987, Bell had been a party to certain collective bargaining agreements with the International Brotherhood of Teamsters. Those agreements required that Bell make pension contributions to the Fund on behalf of certain employees. On May 3, 1987, Bell sold its covered operations and ceased to have any obligation for further contributions. Bell sold substantially all its assets to Best Transport, Inc. ("Best") which agreed to be bound to make pension contributions for former Bell employees. By July 31, 1987 at the latest, Bell had converted all of its assets to cash. Although it filed papers indicating that it intended to distribute the cash to its shareholders, it has not done so. Bell continues to hold the cash.

 The cessation of Bell's operations ordinarily would constitute a complete withdrawal from the Fund. Bell, however, will not be subject to withdrawal liability if the requirements set forth in 29 U.S.C. § 1384 are satisfied. That statute provides:

 
(A) the purchaser has an obligation to contribute to the plan with respect to the operations for substantially the same number of contribution base units for which the seller had an obligation to contribute to the plan;
 
(B) the purchaser provides to the plan for a period of 5 plan years commencing with the first plan year beginning after the sale of assets, a bond issued by a corporate surety company that is an acceptable surety for purposes of section 1112 of this title, or an amount held in escrow by a bank or similar financial institution satisfactory to the plan, in an amount equal to the greater of--
 
(i) the average annual contribution required to be made by the seller with respect to the operations under the plan for the 3 plan years preceding the plan year in which the sale of the employer's assets occurs, or
 
(ii) the annual contribution that the seller was required to make with respect to the operations under the plan for the last plan year before the plan year in which the sale of the assets occurs, which bond or escrow shall be paid to the plan if the purchaser withdraws from the plan, or fails to make a contribution to the plan when due, at any time during the first 5 plan years beginning after the sale; and
 
(C) the contract for sale provides that, if the purchaser withdraws in a complete withdrawal, or a partial withdrawal with respect to operations, during such first 5 plan years, the seller is secondarily liable for any withdrawal liability it would have had to the plan with respect to the operations (but for this section) if the liability of the purchaser with respect to the plan is not paid.
 
(2) If the purchaser--
 
(A) withdraws before the last day of the fifth plan year beginning after the sale, and
 
(B) fails to make any withdrawal liability payment when due,
 
then the seller shall pay to the plan an amount equal to the payment that would have been due from the ...

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