Federal bankruptcy court holds debtor's interest in s. 457 plan is property of bankruptcy estate

Article Abstract:

A federal bankruptcy court ruled in Pedersen v. Public Employees Benefit Services Corp that a debtor's portion of an IRC section 457 plan must be considered the property of that person's bankruptcy estate according to 11 USC 541(a)(1). In reaching this conclusion, the court held the bankruptcy law provision should be construed broadly to include all the debtor's apparent interests, even though section 457 states plan assets are the employer's property. This issue will probably ultimately have to be resolved by the US Supreme Court since another federal court has ruled differently in a similar case.

Debtor and creditor, Bankruptcy

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Attorney-client privilege blocks disclosure to participants of non-fiduciary communications with plan sponsor

Article Abstract:

The US 2d Circuit Court of Appeals upheld the attorney-client privilege where one lawyer represented the benefits plan sponsor and ERISA plan participants in Becher v. Long Island Lighting Retirement Income Plan. The court denied the plaintiffs' request for documents which related to privileged communications regarding plan amendments. The plaintiffs argued that the privilege was waived due to the lawyer's representing both clients. The court found that the lawyer represented the plaintiffs as to fiduciary functions and they could discover documents relating to that function only.

Confidential communications, Discovery (Law), Attorney-client privilege

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First case under Pension Annuity Protection Act allows participants who received Executive Life contracts to sue under ERISA

Article Abstract:

The US Court of Appeals for the Ninth Circuit ruled in Kayes v. Pacific Lumber Co. that the plaintiffs had standing to sue for breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) even though they were no longer plan participants because the plan had been terminated. The Pension Annuity Protection Act of 1994 established the right to sue for persons who were plan participants or beneficiaries at the time of the ERISA violation at issue. The Ninth Circuit also considered whether purchases of Executive Life annuities were prohibited transactions.

Laws, regulations and rules, Standing (Law), Annuities, Executive Life Insurance Co.

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