Kayes
Kayes v. Pacific Lumber Co.
Opinion
Lead Opinion
Choy, J.
I. FACTUAL AND PROCEDURAL BACKGROUND
This appeal arises out of an action brought by Plaintiffs under the Employee Retirement Income and Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., on behalf of beneficiaries and participants of the Pacific Lumber Company Pension Plan (“the Plan”). Plaintiffs are former employees, or eligible spouses of former employees of Pacific Lumber Company (“PLC”) or of its subsidiaries. Defendant Charles Hurwitz is principal owner of Maxxam, Inc. (“Maxxam”), which owns Maxxam Group Inc. (“MGI”), which in turn owns PLC. Maxxam and MGI are also defendants. Defendant William Leone is the former President and CEO of PLC, and former director of Maxxam and MGI. Defendants Schwartz and Iaco are present or former executives of Maxxam or MGI.
This action was filed in response to the termination in 1986 of the Plan, and the subsequent purchase by PLC of a group annuity contract from Executive Life Insurance Company (“ELIC”). The Plan termination followed the successful hostile takeover of PLC by MGI in the fall of 1985. The takeover was financed by $450 million in “junk” bonds, nearly $100 million of which were purchased by ELIC.