Retirement Plan of the Unite Here National Retirement Fund v. Kombassan Holding A.S.
629 F.3d 282
2d Cir.2010Background
- Kombassan appeals district court judgment holding it liable for HOM's ERISA withdrawal liability under alter ego theory and judicial estoppel.
- HOM, a Massachusetts retailer, was acquired by Kombassan via stock purchase with complex cross-ownership through four Turkish assignees to evade Turkish investment limits.
- Kombassan assigned HOM stock to four Turkish entities but Bayram, Kombassan's chairman, controlled HOM and its board.
- HOM ceased operations and filed for bankruptcy; Plan asserted withdrawal liability of $668,929 with prejudgment interest and fees.
- District court found alter ego status and liability, and admitted the Plan's Exhibit 16 calculation; judicial estoppel theory was alternative but not decisive.
- On appeal, Kombassan argues against alter ego liability and the admissibility of Exhibit 16; the court affirms liability under alter ego and admissibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kombassan is liable under alter ego theory | Kombassan controlled HOM; assignments were a sham to evade Turkish law. | Entities existed concurrently; no sham; standard alter ego requires more than parallel existence. | Yes; Kombassan is liable as HOM's alter ego. |
| Whether Exhibit 16 was properly admitted as a business record | Exhibit 16 was kept in the ordinary course by Plan staff. | Need foundation to show business-record basis; potential foundation flaws raised by Kombassan. | Exhibit 16 properly admitted as a business record. |
| Whether the district court abused its discretion in applying alter ego factors | Flexible, broad ERISA alter ego test supported by interlocking control and common purpose. | Test should be limited; insufficient indicators of alter ego control. | District court did not abuse discretion; findings supported alter ego status. |
Key Cases Cited
- Corbett v. MacDonald Moving Srvcs., Inc., 124 F.3d 82 (2d Cir. 1997) (common control for withdrawal liability under ERISA)
- Mass. Carpenters Cent. Collection Agency v. Belmont Concrete Corp., 139 F.3d 304 (1st Cir. 1998) (alter ego broad, flexible test in ERISA context)
- Newspaper Guild of N.Y., Local No. 3 of the Newspaper Guild, AFL-CIO v. NLRB, 261 F.3d 291 (2d Cir. 2001) (alter ego to prevent evasion through sham transactions)
- Leddy v. Standard Drywall, Inc., 875 F.2d 383 (2d Cir. 1989) (ERISA protection; benefit of employees; veil-piercing policy)
- Express Servs., Inc. v. N.Y. State Teamsters Conf. Pension & Ret. Fund, 426 F.3d 640 (2d Cir. 2005) (policy of piercing corporate form to protect benefits)