In re, 20-3384

Algozine Masonry Restoration, Inc., a signatory to a collective bargaining agreement, was required to remit contributions to three multi-employer ERISA-covered funds: Welfare, Pension, and Annuity.
Algozine fell behind on contributions and filed Chapter 11 on November 10, 2016.
The three Funds filed separate proofs of claim under 11 U.S.C. § 507(a)(5) for contributions covering 15, 15, and 13 employees respectively; after adjustments for payments, the Funds sought a combined priority of $51,394.86.
Algozine objected, arguing the § 507(a)(5) priority cap ($12,850 per employee at the time) must be applied to the Funds’ aggregate claims (across all plans), which would reduce priority recovery to $5,556.34.
The bankruptcy court and the district court ruled for the Funds; the Seventh Circuit reviewed de novo and affirmed, holding the statute unambiguously caps recovery per plan ("each such plan").
An alternate argument challenging inclusion of certain employees (hours/work within 180 days) was waived by stipulation; the court noted § 507(a)(5) uses the number of employees, not hours.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 507(a)(5)’s priority limitation applies to each employee benefit plan separately or to the aggregate of all plans sponsored by the debtor	Apply the $12,850-per-employee cap to the Funds’ aggregate claims across plans, substantially reducing priority recovery	The statute allows "each such plan" to claim priority up to its own per-plan cap; caps are applied per plan	The court held caps apply per plan; each fund’s claim is limited individually (affirmed)
Whether certain employees included in the Funds’ claims rendered services within the 180-day priority period (eligibility issue)	Some listed employees did not work within the 180-day window and thus should be excluded from the priority headcount	Funds treated priority as tied to number of employees covered, not hours, and parties stipulated amounts	Issue waived by stipulation; court observed § 507(a)(5) uses number of employees (not hours)

In re ABC-NACO, 483 F.3d 470 (7th Cir. 2007) (standard of review: de novo for legal questions, clear error for factual findings)
United States v. Balint, 201 F.3d 928 (7th Cir. 2000) (adopt plain-meaning approach to statutory interpretation)
In re Consolidated Freightways Corp. of Delaware, 564 F.3d 1161 (9th Cir. 2009) (interprets § 507(a)(5) limit as tied to number of employees rather than hours)