The opinion of the court was delivered by: MISHLER
Memorandum of Decision and Order
JACOB MISHLER, UNITED STATES DISTRICT JUDGE
We granted partial summary judgment in favor of the Local 282 Pension Fund ("Fund") and against defendant Certified Industries, Inc. in the amount of $ 1,166,865 with interest at 11% from May 4, 1983 and directed a trial on the claim against defendants IIJ Enterprises, Inc. ("Enterprises"), IIJ Associates ("IIJ") and Split Rock Realty, Inc. ("Split Rock"). See Memorandum of Decision dated October 25, 1985, 645 F. Supp. 998.
By notice dated January 29, 1986, defendants moved to (1) vacate the order of October 23, 1985 on the ground that controlling regulations promulgated by the Pension Benefit Guarantee Corporation ("PBGC") "exempt the transaction at issue from withdrawal liability as a matter of law"; (2) grant leave to amend defendants' answer by incorporating the said regulations as a defense; and (3) staying the action to afford Certified the opportunity to apply to PBGC "for a variance which would relieve Certified of the obligation to pay withdrawal liability."
On February 19, 1986 the parties entered into a stipulation of facts bearing on the unresolved issue, i.e., whether Enterprises, IIJ and Split Rock were, at the time of the sale of Certified's assets at the time of the sale (June 30, 1981), under "common control" of the business with Certified and should therefore be treated "as a single employer." 29 U.S.C. § 1301(b)(1). Thereupon plaintiffs moved for summary judgment against the remaining defendants jointly and severally together with Certified.
PBGC denied Certified's application for a waiver of the requirements of section 4204(a)(1)(B) and (C) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1384(a)(1)(B) and (C). (Letter dated May 30, 1986 PBGC to Michael D. Hess, Esq.) Defendants' motions are in all respects denied.
Plaintiffs' Motion for Judgment
The stipulation of facts and the undisputed facts establish the following: Certified Industries, Inc. was incorporated in December 1972. From 1972 until June 30, 1981 it was engaged in the business of manufacturing concrete and owned interests in real estate. On June 30, 1981 Certified sold the concrete manufacturing business, together with the plant and real estate (Newtown Creek Property) at which the business was operated, for the sum of eight million ($ 8,000,000) dollars to Marine Pollution Service, Inc. (Contract dated November 25, 1980). The interest of the shareholders were:
Walter C. Goldstein 37 1/2%
Bernard Jereski 12 1/2%
Frank Phelan 10%
Anthony C. Bertone 5%
De Paola Donor Trusts 35%
After the sale of the concrete manufacturing business to Marine, Certified changed its corporate name to IIJ Enterprises, Inc. and remained in the business as the owner of real estate interests.
On February 14, 1983 the Fund served notice on Certified of Certified's withdrawal liability in the amount of $ 1,167,555. On August 23, 1983, Certified's counsel wrote the Fund challenging the assessment. The Fund through counsel responded by reasserting its right to the sum claimed and advising Certified that it was in default in payments due under the statute. On September 7, 1983, the shareholders of IIJ Enterprises, Inc. formed a partnership in which each partner had the same interest as he held as a shareholder in IIJ Enterprises, Inc. On September 30, 1983, IIJ Enterprises, Inc. transferred all its assets to IIJ Associates. IIJ Enterprises, Inc. elected to dissolve in 1983; a Certificate of Dissolution was executed on March 20, 1985. As of January 1, 1985, some of IIJ Associates' assets were sold to third parties. All the remaining assets (except the New Rochelle Shopping Mall) were transferred to Brookhaven Property Associates, a partnership consisting of the same parties holding the same interest they held in IIJ Associates.
Split Rock Realty Company, Inc. was incorporated in November 1981 as a real estate management corporation. The shareholders are Joseph DePaola (37 1/2%), Walter C. Goldstein (37 1/2%), Frank Phelan (12 1/2%) and Bernard Jereski (12 1/2%). Split Rock manages most of the properties it owns as well as properties it transferred to Brookhaven Property Associates. Split Rock did not receive any of the assets of IIJ Enterprises, Inc.
Neither the partnership IIJ Associates nor the corporation Split Rock Realty Company, Inc. were in existence at the time of the sale of Certified's concrete manufacturing business to Marine. The definition of a "single employer" under 29 U.S.C. § 1301(b)(1) as refined pursuant to Treas. Reg. § 11.414(c)-2 imposing liability upon all members of a group exercising "common control" must be read in light of the purpose for imposing such liability. It is to fix liability upon those who were responsible at the time of withdrawal for continued funding. In Re Challenge Stamping and Porcelain Co., 719 F.2d 146, 151 (6th Cir. 1983).