The U.S. Supreme Court declined to hear White Consolidated Industries Inc.'s appeal of a 3rd Circuit Court of Appeals decision reinstating the Pension Benefits Guaranty Corp.'s $82 million lawsuit against the Cleveland steelmaker.
Last summer, the appeals court said White must contribute to its underfunded pension funds even more than five years after it had sold some divisions and transferred nine insufficiently funded pension plans to the buyer, Blaw Knox Corp. of Pittsburgh.
White sold the divisions to Blaw Knox in 1985. Under an agreement connected with the sale, White funded the plans until 1990.
One of the plans ran out of money two years later following the sale and was taken over by the PBGC.
It was underfunded by about $81.6 million.
The PBGC then sued White for evading its pension liabilities by structuring an agreement that would keep the underfunded pension plans afloat for only five years.
Federal law holds former plan sponsors responsible for pension liabilities if the plans terminate within five years of the sale of businesses.
The appeals court last year ruled the original company was still responsible for funding the pension plans.
A spokeswoman for the PBGC said agency executives are pleased they now can prove before a lower court that the White Consolidated "transfer of businesses with nine grossly underfunded pension plans to Blaw Knox was undertaken with the principal purpose to evade pension liability."
