NEW YORK A union pension fund is suing RG Steel Holdings LLC for some $6.34 million related to pension payments around the time of the defunct steelmakers bankruptcy.
The lawsuit filed in U.S. District Court in Illinois alleges that the Central States, Southeast and Southwest Areas Pension Fund, a multiemployer pension plan, had incurred penalties and losses as a result of RGs withdrawal from the pension plan after filing for Chapter 11 bankruptcy protection in May last year (amm.com, May 31, 2012).
The lawsuit said that around Aug. 25, 2012, RG Holdings "directly or indirectly owned at least 80 percent of the ownership interest of RG Steel Wheeling LLC" and that RG Wheeling was bound by collective bargaining agreements with local unions under which RG was required to make contributions to the pension fund.
The pension fund alleges that when RG Steel "permanently ceased to have an obligation to contribute to the pension fund" it incurred a withdrawal liability.
Attorneys for the pension fund and RG Steel could not be reached for comment.