10-1890 Feinberg v. RM Acquisition, LLC

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Employment
ERISA

Participants in a retirement plan cannot sue the buyer of an ERISA plan’s assets, when the plan’s sponsor sells all the assets out of which plan benefits might be paid and distributes the proceeds of the sale, thereby becoming a shell, but the buyer does not assume any of the seller’s liabilities under the plan.
“There may conceivably have been a fraud but if so it is likely to have been committed by Rand McNally rather than by RM. Suppose Rand McNally distributed to its shareholders, in the form of a dividend, all the money it received from the sale of its assets to RM. Because a dividend is not an exchange for reasonably equivalent value, that would be a fraud by Rand McNally on its creditors, including the participants in Rand McNally’s top hat plan, and the participants could seek redress against the shareholders under state law. 740 ILCS 160/1 et seq.; General Electric Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1079-81 (7th Cir. 1997) (applying Illinois law); Boyer v. Crown Stock Distribution, Inc., 587 F.3d 787, 792 (7th Cir. 2009). The suit if successful would generate funds out of which to pay in whole or part any judgment that the participants had obtained against Rand McNally for defrauding them. But Feinberg hasn’t followed that route-he’s obtained no judgment against Rand McNally, and indeed has dropped it as a defendant-and we don’t even know whether Rand McNally had any assets to distribute to its shareholders when it was sold to RM.”

Affirmed.

10-1890 Feinberg v. RM Acquisition, LLC

Appeal from the United States District Court for the Northern District of Illinois, Andersen, J., Posner, J.

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