Employers A, B, C, D and E are members of a controlled group. Employer A, a C corporation, participates in Multiemployer Plan X, while Employers B, C, D & E neither sponsor a qualified plan nor participate in Plan X. Employer A ceases to do business, and has a large withdrwawal liability from Plan X--the shareholders of Employer A do not have personal liability, because Employer A is a corporation (assuming no fraudulent transactions). Employers B, C, D & E, as members of the controlled group which includes Employer A, share Employer A's withdrawal liability. Employer B is a partnership, Employer C is an LLC taxed as a corporation, Employer D is an LLC taxed as a partnership, and Employer E is an S corporation. Here is how I analyze (or don't analyze) the withdrawal liability of the individuals who own Employers B, C, D & E:

• Employer B, the partnership, passes through its liability to the individual partners.
• Employer C, the LLC taxed as a corporation, passes through no liability to its members.
• How about Employer D, the LLC taxed as a partnership? Does its LLC status protect the individual members from personal liability, or is the fact that Employer D is taxed as a partnership cause the members to have individual libaility in the same manner is if Employer D were, in fact, a partnership?
• And how about Employer E, the S corporation? Are its shareholders treated as partners so that they have individual liability?

Any thoughts, comments?

If you look at the court decisions where general partners were stuck with liability, it was by virtue of their liability under State law for liabilities of their partnerships. So, I don't think you'll find any authority in the cases (or the statute) for making LLC members liable notwithstanding the LLC's tax treatment as a partnership (and the possible carryover effect of that tax treatment for other Title IV purposes).

Would kind of lay waste to the concept of LLC, wouldn't it?

Wouldn't be the first time that ERISA preemption turned the world upside down . . .

For how imaginitive some multiemployer plan trustees get in trying to pierce the veil, see Board of Trustees of the Western Conference of Teamsters Pension Trust Fund v Lafrenz, 837 F2d 892 (9th Cir 1988). Note, other circuits had refused to follow the result of the Lafrenz case. You can find them by shepardizing the citation.