Bankruptcy – Priorities

By: Derek Hawkins//September 26, 2021//

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7^th Circuit Court of Appeals

Case Name: Algozine Masonry Restoration, Inc., v. Local 52 Chicago Area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry, et al.,

Case No.: 20-3384

Officials: WOOD, ST. EVE, and KIRSCH, Circuit Judges.

Focus: Bankruptcy – Priorities

Employee benefit plans come in many shapes and sizes. Broadly speaking, some focus on retirement, and others focus on welfare benefits such as health care and disability. If the sponsoring employer falls on hard times and files for bankruptcy, section 507 of the Bankruptcy Code affords priority status up to a specified point to certain types of unsecured claims, including claims for unpaid contributions to an employee-benefit plan. 11 U.S.C. § 507(a)(5). The question before us concerns whether the priority limitation found in section 507(a)(5) applies to each fund that seeks unpaid contributions, or if the claims of all funds sponsored by the bankrupt employer must be aggregated.

Affirmed

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Derek A Hawkins is Corporate Counsel, at Salesforce.

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