OCTOBER TERM, 2006
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
BECK, LIQUIDATING TRUSTEE OF ESTATES OF CROWN
VANTAGE, INC., ET AL. v. PACE INTERNATIONAL
UNION ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 05–1448. Argued April 24, 2007—Decided June 11, 2007
Respondent PACE International Union represented employees covered
by single-employer defined-benefit pension plans sponsored and ad-
ministered by Crown, which had filed for bankruptcy. Crown re-
jected the union’s proposal to terminate the plans by merging them
with the union’s own multiemployer plan, opting instead for a stan-
dard termination through the purchase of annuities, which would al-
low Crown to retain a $5 million reversion after satisfying its obliga-
tions to plan participants and beneficiaries. The union and
respondent plan participants (hereinafter, collectively, PACE) filed
an adversary action in the Bankruptcy Court, alleging that Crown’s
directors had breached their fiduciary duties under the Employee Re-
tirement Income Security Act of 1974 (ERISA), 29 U. S. C. §1001 et
seq., by neglecting to give diligent consideration to PACE’s merger
proposal. The court ruled for PACE, and petitioner bankruptcy trus-
tee appealed to the District Court, which affirmed in relevant part, as
did the Ninth Circuit. The Ninth Circuit acknowledged that the deci-
sion to terminate a pension plan is a business decision not subject to
ERISA’s fiduciary obligations, but reasoned that the implementation
of a termination decision is fiduciary in nature. It then determined
that merger was a permissible termination me