Plan Issues in Mergers and Acquisitions, Reorganizations and Other Changes in the Workforce

Virtually every corporate merger, acquisition or other business restructuring involves numerous employee benefits and compensation issues. Given our ever-changing economic and regulatory environment, such corporate transactions often produce challenging employee benefits problems, including concerns arising out of workforce restructuring. Without proper planning or due diligence, significant liabilities can inadvertently be assumed that can reduce the likelihood of a successful transaction.

The lawyers of Troutman Sanders’ Employee Benefits & Executive Compensation practice are routinely involved in all phases of complex transactions and restructurings. We regularly conduct due diligence, draft and negotiate contract terms and conditions (including purchase price adjustments related to underfunded defined benefit plan and other benefits liabilities assumed), help clients analyze and plan for the transaction's impact upon the compensation and benefits structures of the surviving entity, and conduct golden-parachute analyses. We are frequently called upon to address issues such as the following:

  • Underfunded pension plans
  • Multi-employer plan withdrawal liabilities
  • Partial pension plan termination issues
  • Curtailment of post-retirement medical and life insurance obligations
  • Severance obligations
  • Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage
  • Health Insurance Portability and Accountability Act (HIPAA) compliance
  • Worker Adjustment and Retraining Notification (WARN) Act notice requirements
  • Golden parachute excise taxes for public companies in advance of a change in control
  • Planning and structuring of plan spin-offs, mergers and terminations

We work with clients to resolve collectively bargained union retirement and welfare benefit plan issues and to design ongoing, post-transaction compensation and benefits programs. Our assistance does not end with representing the client in assessing liabilities and negotiating contract provisions; we follow through during and after the transition period by establishing, amending, terminating, merging or spinning off employee benefit plans, updating summary plan descriptions, trust agreements and ancillary documents, and assisting in drafting participant communications, as necessary to provide employees with a seamless transition.

In tandem with our Labor and Employment practice, we have extensive experience assisting clients in designing and administering early retirement windows and voluntary and involuntary severance arrangements

Representative Experience

  • Representation of numerous clients acquiring assets that included the transfer of employment of union employees and assumption of such employees' collective bargaining agreements.
  • Representation of clients selling assets or a business unit while retaining the workforce up to or beyond the point of sale.
  • Design of complex benefit offset arrangements to integrate buyer’s and seller's benefits programs.
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