Law firm Jaffe Raitt Heuer & Weiss P.C. is going to have toface a suit over advice that it provided to a private investmentfirm and its executives over multiemployer pension fundliability.

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Related: SCOTUS decision in hospital pension claimsmoves the goal posts

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A report from Bloomberg BNA says that JudgeGeorge Caram Steeh of the U.S. District Court for the EasternDistrict of Michigan has ruled that SSL Assets LLC and itsexecutives may move forward to trial with its suit against the lawfirm. Both sides had filed cross motions for summary judgment,which the judge denied on June 30 (Cohen v. Jaffe Raitt Heuer& Weiss, P.C. , 2017 BL 227043, E.D. Mich., No.2:16-cv-11484, 6/30/17).

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SSL Assets alleged that the legal advice provided by Jaffewas not only faulty, but ended up making SSL liable for $3.9million in withdrawal liability under the Employee Retirement Income Security Act, aswell as making it invest several millions in supporting a companyit had only recently acquired.

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An employer participating in a multiemployer pension plan is liable for itsshare of any underfunded benefits, also known as withdrawalliability, when it withdraws from the plan.

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Related: Why 403b plan sponsors are in a legal hotseat

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The case revolves around the concept of controlled groupliability under ERISA, in which other entities could be responsiblefor the withdrawal liability of a plan sponsor based on commonownership.

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SSL Assets is an affiliate of CoBe Capital LLC; its executivesbuy and turn around distressed businesses.

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According to the report, in 2012, the executives moved to buyLSI Corp., a company that participated in a multiemployer pensionplan that at the time was underfunded.

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One of the SSL Assets executives went to Jaffe for advice onavoiding exposure to LSI’s $3.9 million liability, and Jaffe saidthat SSL Assets and its executives had no direct exposure for theliability.

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Steeh ruled that there are issues of fact on whether Jaffefailed in its duty of care in providing legal advice; in addition,the judge said there are also issues related to causation anddamages.

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But in addition to questions over whether there actually wasattorney-client privilege between Jaffe and the executives, thejudge found that there were issues of fact in dispute that made itimpossible for him to render a decision. Steeh’s opinion allows the case to proceed.

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Stinson Leaonard Street LLP and Mark S. Baumkel represent SSLAssets and the executives in the case, and Plunkett & Cooneyrepresents Jaffe Raitt.

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