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In re A.C.E. Elevator Co., Inc.

United States Bankruptcy Court for the Southern District of New York
347 B.R. 473 (Bankr. S.D.N.Y. 2006)


A.C.E. Elevator Co., Inc. (ACE) (defendant) was in the business of constructing, modernizing, and maintaining elevators. Pursuant to a collective-bargaining agreement, ACE was required to make contributions on behalf of its employees to the National Elevator Industry Benefit Plans (Plans), which consisted of a Pension Plan, a Welfare Plan, and an Educational Plan. The collective-bargaining agreement set forth a formula to calculate the amounts of the contributions based on the number of hours worked by ACE’s employees. ACE fell behind on its payments, resulting in delinquent contributions. In 2004, ACE filed a petition for bankruptcy. The trustees of the Plans (plaintiffs) moved for an order to direct ACE to pay the delinquent contributions, arguing that the contributions were expenses entitled to administrative priority under the United States Bankruptcy Code (Bankruptcy Code), 11 U.S.C. § 101, et seq.

Rule of Law


Holding and Reasoning (Drain, J.)

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