[Federal Register Volume 75, Number 171 (Friday, September 3, 2010)]
[Notices]
[Pages 54191-54192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22012]


=======================================================================
-----------------------------------------------------------------------

PENSION BENEFIT GUARANTY CORPORATION


Pendency of Request for Exemption From the Bond/Escrow 
Requirement Relating to the Sale of Assets by an Employer Who 
Contributes to a Multiemployer Plan: Ricketts Acquisition LLC and the 
Chicago National League Ball Club, LLC

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of pendency of request.

-----------------------------------------------------------------------

SUMMARY: This notice advises interested persons that the Pension 
Benefit Guaranty Corporation (``PBGC'') has received a request from 
Ricketts Acquisition LLC for an exemption from the bond/escrow 
requirement of section 4204(a)(1)(B) of the Employee Retirement Income 
Security Act of 1974, as amended, with respect to the Major League 
Baseball Players Benefit Plan. Section 4204(a)(1) provides that the 
sale of assets by an employer that contributes to a multiemployer 
pension plan will not constitute a complete or partial withdrawal from 
the plan if the transaction meets certain conditions. One of these 
conditions is that the purchaser post a bond or deposit money in escrow 
for the five-plan-year period beginning after the sale. PBGC is 
authorized to grant individual and class exemptions from this 
requirement. Before granting an exemption, the statute and PBGC 
regulations require PBGC to give interested persons an opportunity to 
comment on the exemption request. The purpose of this notice is to 
advise interested persons of the exemption request and solicit their 
views on it.

DATES: Comments must be submitted on or before October 18, 2010.

ADDRESSES: Comments may be submitted by any off the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the Web site instructions for submitting comments.
     E-mail: [email protected].
     Fax: 202-326-4224.
     Mail or Hand Delivery: Legislative and Regulatory 
Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., 
Washington, DC 20005-4026.
    Comments received, including personal information provided, will be 
posted to http://www.pbgc.gov. Copies of comments may also be obtained 
by writing to Disclosure Division, Office of General Counsel, Pension 
Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-
4026, or calling 202-326-4040 during normal business hours. (TTY and 
TDD users may call the Federal relay service toll-free at 1-800-877-
8339 and ask to be connected to 202-326-4040.)

FOR FURTHER INFORMATION CONTACT: Eric Field, Attorney, Office of the 
Chief Counsel, Suite 340, 1200 K Street, NW., Washington, DC 20005-
4026, 202-326-4020. (For TTY/TTD users, call the Federal relay service 
toll free at 1-800-877-8339 and ask to be connected to 202-326-4020.)

SUPPLEMENTARY INFORMATION:

Background

    Section 4204 of the Employee Retirement Income Security Act of 
1974, as amended by the Multiemployer Pension Plan Amendments Act of 
1980 (``ERISA'' or the ``Act''), provides that a bona fide arm's length 
sale of assets of a contributing employer to an unrelated party will 
not be considered a withdrawal if three conditions are met. These 
conditions, enumerated in section 4204(a)(1)(A)-(C) are that:
    (A) The purchaser has an obligation to contribute to the plan with 
respect to covered operations for substantially the same number of 
contribution base units for which the seller was obligated to 
contribute;
    (B) The purchaser obtains a bond or places an amount in escrow, for 
a period of five plan years after the sale, equal to the greater of the 
seller's average required annual contribution to the plan for the three 
plan years preceding the year in which the sale occurred or the 
seller's required annual contribution for the plan year preceding the 
year in which the sale occurred (the amount of the bond or escrow is 
doubled if the plan is in reorganization in the year in which the sale 
occurred); and
    (C) The contract of sale provides that if the purchaser withdraws 
from the plan within the first five plan years beginning after the sale 
and fails to pay any of its liability to the plan, the seller shall be 
secondarily liable for the liability it (the seller) would have had but 
for the relief afforded under section 4204.
    The bond or escrow described above would be paid to the plan if the 
purchaser withdraws from the plan or fails to make any required 
contributions to the plan within the first five plan years beginning 
after the sale. Additionally, section 4204(b)(1) provides that if a 
sale of assets is covered by section 4204, the purchaser assumes by 
operation of law the contribution record of the seller for the plan 
year in which the sale occurred and the preceding four plan years.

[[Page 54192]]

    Section 4204(c) of ERISA authorizes the PBGC to grant individual or 
class variances or exemptions from the purchaser's bond/escrow 
requirement of section 4204(a)(1)(B) when warranted. The legislative 
history of section 4204 indicates a Congressional intent that the 
statute be administered in a manner that assures protection of the plan 
with the least intrusion into normal business transactions practicable. 
Senate Committee on Labor and Human Resources, 96th Cong., 2nd Sess., 
S. 1076, The Multiemployer Pension Plan Amendments Act of 1980: Summary 
and Analysis of Considerations 16 (Comm. Print, April 1980); 128 Cong. 
Rec. S10117 (July 29, 1980). The granting of a variance or exemption 
from the bond/escrow requirement does not constitute a finding by PBGC 
that a particular transaction satisfies the other requirements of 
section 4204(a)(1).
    Under PBGC's regulation on variances for sales of assets (29 CFR 
part 4204), a request for a variance or exemption from the bond/escrow 
requirement under any of the tests established in the regulation 
(Sec. Sec.  4204.12 and 4204.13) is to be made to the plan in question. 
PBGC will consider variance or exemption requests only when the request 
is not based on satisfaction of one of the four regulatory tests under 
regulation Sec. Sec.  4204.12 and 4204.13, or when the parties assert 
that the financial information necessary to show satisfaction of one of 
the regulatory tests is privileged or confidential financial 
information within the meaning of 5 U.S.C. 552(b)(4) (Freedom of 
Information Act). See 29 CFR 4204.21.
    Under Sec.  4204.22 of the regulation, PBGC shall approve a request 
for a variance or exemption if it determines that approval of the 
request is warranted, in that it:
    (1) Would more effectively or equitably carry out the purposes of 
Title IV of the Act; and
    (2) Would not significantly increase the risk of financial loss to 
the plan.
    Section 4204(c) of ERISA and Sec.  4204.22(b) of the regulation 
requires PBGC to publish a notice of the pendency of a request for a 
variance or exemption in the Federal Register, and to provide 
interested parties with an opportunity to comment on the proposed 
variance or exemption.

The Request

    PBGC has received a request, dated November 25, 2009, from Ricketts 
Acquisition LLC (the ``Purchaser'') for an exemption from the bond/
escrow requirement of section 4204(a)(1)(B) with respect to its 
purchase of the Chicago National League Ball Club, LLC (the 
``Seller''). In the request, the Purchaser represents, among other 
things, that:
    1. The Seller was obligated to contribute to the Major League 
Baseball Players Benefit Plan (the ``Plan'') for certain employees of 
the purchased operations.
    2. The Purchaser has agreed to assume the obligation to contribute 
to the Plan for substantially the same number of contribution base 
units as the Seller.
    3. The Seller has agreed to be secondarily liable for any 
withdrawal liability it would have had with respect to the purchased 
operations (if not for section 4204) should the Purchaser withdraw from 
the Plan and fail to pay its withdrawal liability.
    4. The estimated amount of the withdrawal liability of the Seller 
with respect to the operations subject to the sale is $34,030,359.
    5. The amount of the bond/escrow established under section 
4204(a)(1)(B) is $4,068,868, which is to be posted if PBGC has not 
acted on the request by the end of the plan year of the request.
    6. The Major League Baseball Clubs (the ``Clubs'') have established 
the Major League Central Fund (the ``Central Fund'') pursuant to the 
Major League Baseball Constitution. Under this Constitution, the Office 
of the Commissioner of Baseball pays contributions to the Plan from the 
Central Fund on behalf of each participating employer in satisfaction 
of the employer's pension liability under the Plan's funding agreement. 
The monies in the Central Fund are derived directly from (i) gate 
receipts from All-Star games; (ii) radio and television revenue from 
World Series, League Championship Series, Division Series, All-Star 
Games, and (iii) certain other radio and television revenue, including 
revenues from foreign broadcasts, regular, spring training, and 
exhibition games (``Revenues'').
    7. In support of the exemption request, the Purchaser asserts that 
``[t]he Plan is funded directly from Revenues which are paid from the 
Central Fund directly to the Plan without passing through the hands of 
any of the Clubs. Therefore, the Plan enjoys a substantial degree of 
security with respect to contributions on behalf of the Clubs. A change 
in ownership of a particular Club does not affect the obligation of the 
Central Fund to fund the Plan out of the Revenues. As such, approval of 
this exemption request would not increase the risk of financial loss to 
the Plan.''
    8. A complete copy of the request was sent to the Plan and to the 
Major League Baseball Players Association by certified mail, return 
receipt requested.

    Issued at Washington, DC, August 27, 2010.
Joshua Gotbaum,
Director.
[FR Doc. 2010-22012 Filed 9-2-10; 8:45 am]
BILLING CODE 7708-01-P