Evans v. Sterling Chemicals, Inc., No. 10-CV-20493, 2011 BL 264247 (5th Cir. Oct. 13, 2011) The U.S. Court of Appeals for the Fifth Circuit held that Sterling Chemicals, Inc. and related companies (collectively, Sterling) improperly reduced the health benefits of retirees who were former employees of Cytec Acrylic Fibers, Inc. and related companies (collectively, Cytec), because Sterling failed to obtain prior written consent from Cytec pursuant to an asset purchase agreement (APA) provision. Relying on Halliburton Co. Benefits Committee v. Graves, 463 F.3d 360(5th Cir. 2006), the Court held that the APA provision (§ 5.05(f)) constituted a valid amendment to the Sterling retiree benefit plans (collectively, Plan) as a matter of law that precluded Sterling from unilaterally increasing premiums for Sterling retirees who had become employees in connection with Sterling's acquisition of Cytec assets. The Court also concluded that Sterling assumed § 5.05(f) in bankruptcy proceedings, and that reversal and remand of the district court's post-bench-trial ruling in Sterling's favor was warranted.
The APA and the Plan
District Court Rules for Sterling on All Claims
Section 5.05(f) Qualified as a Valid Plan Amendment
Section 5.05(f) Was a Valid Plan Amendment Assumed, Not Rejected, in Bankruptcy
Notes on Employee Benefits in Mergers and Acquisitions
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