Amalgamated Insurance Fund v. William B. Kessler, Inc.
This case is an appeal from a bankruptcy court decision concerning the priority status of a "withdrawal liability" claim. Amalgamated Insurance Fund, a multiemployer retirement fund, appealed the ruling that its claim against Kessler, a clothing manufacturer in Chapter 11, was a general unsecured claim rather than an administrative expense. Kessler had ceased operations during bankruptcy, triggering the withdrawal liability under MPPAA. The District Court affirmed the bankruptcy court's decision, holding that withdrawal liability, which represents a share of unfunded vested liability accrued prior to bankruptcy, is not an administrative expense. The court distinguished withdrawal liability from severance pay, which it considered an administrative expense when termination occurs during bankruptcy.