Buyer Beware – Court Lowers Hurdle to Make Claim for Withdrawal Liability Under the Successorship Doctrine

October 08, 2015

In Tsareff v. ManWeb Services, Inc., the U.S. Court of Appeals for the Seventh Circuit held that an asset purchaser’s pre-closing knowledge of a seller’s potential multiemployer plan withdrawal liability could be sufficient to obligate the purchaser for the seller’s withdrawal liability even where (a) the amount of the withdrawal liability was not determined until after the sale and (b) such liability was not assumed by the purchaser under the asset purchase agreement. The Tsareff decision likely will impact the way asset purchasers approach transactions involving companies that contribute or contributed to multiemployer plans, with an increased focus on protecting against these liabilities.

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