Compliance July 12, 2007

Plan of Bankrupt Law Firm Goes to PBGC

July 12, 2007 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) announced it has assumed responsibility for the underfunded pension plan covering about 460 employees and retirees of Coudert Brothers LLP, New York.
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Coudert Brothers, which is now liquidating, missed $2.2 million in required pension contributions and the pension plan will be abandoned as a result of the firm’s dissolution, the announcement said. PBGC estimates the Coudert Brothers LLP Employees Pension Plan, which terminated on December 31, 2006, is about 66% funded, with some $17 million in assets to cover about $26 million in liabilities.

The agency expects to be liable for $8.5 million of the $9 million shortfall, and said assumption of the plan’s unfunded liabilities will have no material effect on its financial statements, according to generally accepted accounting principles.

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Coudert Brothers, which once featured an international practice with 28 offices in 15 countries, filed for Chapter 11 protection on September 22, 2006 – a year after the firm lost two lawsuits, including a $2.5 million malpractice suit filed by a former client, Portfolio Media. The firm voted to dissolve its partnership and discontinue its practice in August 2005, after a planned merger with global law firm Baker & McKenzie fell through.

Within the next several weeks, the PBGC will send notification letters to all plan participants. Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2006 is $47,659.08 per year, the announcement said.

Workers and retirees with questions may visit www.pbgc.gov or call 800-400-7242. Further
information may be found at http://www.pbgc.gov/workers-retirees/benefits-information/content/page13692.html .

Benefits July 11, 2007

Court Clears Path for Dunkin' Donuts Pork Sale Suit

July 11, 2007 (PLANSPONSOR.com) - The 7th U.S. Circuit Court of Appeals has given the go-ahead to a discrimination lawsuit filed by a Muslim Dunkin' Donuts franchisee, who claimed he was denied a contract renewal because he refused to sell pork products.
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The suit filed by Palestinian Arab Walid Elkhatib claims that the company discriminated against him based on his race when it made the sale of breakfast sandwiches with bacon, ham or sausage a mandatory part of his franchise agreement. The green light by the appeals court reverses a lower court’s opinion in 2004 that rejected Elkhatib’s discrimination claim.

Elkhatib has had the Chicago-area franchise since 1979, before the company began selling pork, which happened in 1984. Dunkin’ Donuts didn’t object when he made the decision to sell the breakfast sandwiches without pork, even giving him a sign that read “Meat Products Not Available.”

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That support changed in 2002, when Dunkin’ Donuts said that he would not be able to relocate or renew his franchise agreement because he was not carrying the entire product line. He then sued Dunkin’ Donuts and its then-parent company Allied Domecq for racial discrimination.

Dunkin’ Donuts contended that “Elkhatib was denied the right to relocate and renew his franchises because of his refusal to carry a full line of Dunkin Donuts products, including pork products, and not due to his race,” according to the opinion.

According to the opinion written by Judge IIana Diamond Rovner, three other franchisees in the area were permitted to continue operating without selling the breakfast sandwiches, for reasons not related to religious beliefs.

“There is significant evidence that the carrying of breakfast sandwiches was not an issue of importance to Dunkin Donuts. It allowed other franchises in the area to refuse to carry any breakfast sandwiches at all, when merely relocating the stores, or in one case merely rearranging the displays, would have allowed them to carry the full line,” Rovner wrote.

For the full opinion go here .

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