Kinek v. Gulf & Western, Inc.
The Kinek plaintiffs and Pension Benefit Guaranty Corporation (PBGC) sued Gulf & Western, Inc. (G&W) and its pension plan for alleged violations of a collectively-bargained pension agreement and ERISA, stemming from a 'spin-off' where G&W transferred assets and liabilities to Horsehead Industries' pension plan. Plaintiffs argued G&W failed to fully fund vested pension benefits upon this transfer, as contractually required by the G&W Plan's sections 3.1 and 10.2. The court confirmed plaintiffs' standing and applied a de novo standard of review. It ruled that the G&W Plan's provisions, when read together, obligated G&W to provide full funding for vested benefits during an asset transfer. Consequently, the court denied G&W's motion for summary judgment and granted the Kinek plaintiffs' cross-motion for partial summary judgment, holding G&W liable.