Key Takeaways
- • A federal judge ruled that Oregon baking company US Bakery must cover the pension debts of California pastry company Svenhard's Swedish Bakery, which it acquired in 2019.
- • Judge Michael H. Simon found the acquisition was designed to "evade or avoid" pension liability and must be disregarded for purposes of federal pension law.
- • The Nov. 10, 2026 opinion holds US Bakery and two of its subsidiaries liable for Svenhard's debts following a trial.
- • The transaction was negotiated in secret and concealed from the pension fund, which had agreed to a reduced settlement with Svenhard's.
Summary
A federal judge has ruled that Oregon-based US Bakery must cover the pension debts of Svenhard's Swedish Bakery, a California pastry company it acquired in 2019, according to Bloomberg Law. The ruling followed a trial and was issued in a Nov. 10, 2026 opinion by Judge Michael H. Simon.
In his opinion, Simon found that the 2019 acquisition was designed to "evade or avoid" liability and therefore must be disregarded for purposes of federal pension law. The court held US Bakery and two of its subsidiaries liable for Svenhard's obligations.
According to the report, the transaction was negotiated in secret and was concealed from the pension fund. The fund had agreed to a reduced settlement with Svenhard's, a arrangement the court effectively set aside as it applied to the acquiring company.
The decision underscores that courts will look through corporate transactions structured to avoid multiemployer pension withdrawal liability. Plan sponsors and acquirers involved in restructurings should weigh such exposure when structuring deals. The full article contains additional detail that was not available in the excerpt reviewed.
In his opinion, Simon found that the 2019 acquisition was designed to "evade or avoid" liability and therefore must be disregarded for purposes of federal pension law. The court held US Bakery and two of its subsidiaries liable for Svenhard's obligations.
According to the report, the transaction was negotiated in secret and was concealed from the pension fund. The fund had agreed to a reduced settlement with Svenhard's, a arrangement the court effectively set aside as it applied to the acquiring company.
The decision underscores that courts will look through corporate transactions structured to avoid multiemployer pension withdrawal liability. Plan sponsors and acquirers involved in restructurings should weigh such exposure when structuring deals. The full article contains additional detail that was not available in the excerpt reviewed.
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