Man gets money for not paying into pension

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In a strange twist in a bankruptcy case, a businessman actually benefited financially by not paying into a pension fund for his company.

In the appeal of Barry G. Radcliffe's bankruptcy case by International Painters and Allied Trades Industry Pension Fund, No. 08-2885, International Painters appealed an order from the U.S. District Court, Northern District of Indiana, which affirmed the judgment of the bankruptcy court finding International violated bankruptcy law and had to pay damages to Radcliffe for withholding his pension payments.

Radcliffe owned a company in which he had a labor agreement to contribute to the fund; he stopped making payments, but personally guaranteed to pay. When he didn't, International got a declaratory judgment against him; before it could recover, Radcliffe filed for bankruptcy. Prior to filing bankruptcy, Radcliffe requested his pension benefits from the fund. International withheld part of his payments in order to satisfy his debt arising from the default judgment, despite his notification he believed the setoff violated the automatic stay that took effect when he filed for bankruptcy.

The bankruptcy court, which the District Court affirmed, ordered International to pay compensatory damages, interest, punitive damages, and attorney fees.

Despite being "somewhat uneasy" with the end result that affirming the lower courts' decisions means Radcliffe gets a seemingly undeserved windfall, the 7th Circuit Court of Appeals affirmed.

The federal appellate court found the setoff by the fund - withhold some pension benefits to satisfy the default judgment - violated the automatic stay under 11 U.S.C. Section 362(a)(6). International argued the benefits weren't property of the estate, so the offset was proper, and it didn't violate the statute because the letter it sent Radcliffe informing him of the offset wasn't coercive or harassing. The 7th Circuit judges disagreed, writing the letter did violate the statute because it made the decision to withhold funds without first seeking court approval, wrote Judge Terence Evans.

The fund acted willfully in its violation and Radcliffe is therefore entitled to damages.

The 7th Circuit agreed with the lower courts that the stay shouldn't have been lifted under Employment Retirement Income Security Act's anti-alienation provisions. None of the exemptions under the anti-alienation provisions apply to International and its reliance on Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 129 S. Ct. 865 (2009), is misplaced, wrote the judge. The bankruptcy judge was well within his discretion in refusing to lift the stay and to act otherwise would have been an exercise in futility, wrote Judge Evans.

The federal appellate judges also affirmed the bankruptcy court's calculation of compensatory damages for pre-petition pension benefits, the award of punitive damages, and the interest rate applied to the damage award.


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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.