Most of it didn’t interest me, but the case dealt with whether the plaintiffs’ state-law claim for tortious interference of contract was preempted under ERISA. The contract is a pension plan. I was more interested in the interference claim than the ERISA or preemption issues.
Investment firm Heartland Industrial Partners, L.P. held an ownership interest in Metaldyne Corporation and affiliates on Metaldyne’s directors and executive officers.
Heartland agreed to sell its interest to Ripplewood Holdings, another investment firm. Metaldyne was a public company at the time and filed proxy and information statements related to the deal. The filings failed to disclose that Metaldyne would be obligated to pay certain Metaldyne executives, the plaintiffs, $13 million as a result of the deal due to a change of control provision in Metaldyne’s SERP.*
Ripplewood threatened to back out when it found out about the payment obligation, so Heartland decided to declare the SERP invalid. Problem solved.
The Problem Arises
The central question of this particular case is whether the plaintiff’s complaint can be removed to federal court. After a lot of discussion of the type of civil procedure stuff I learned in law school and have since tried to forget, the more interesting question is whether there is a tortious interference claim**, which would involve Michigan law.
The Relevant Stuff To Me
Under Michigan law, one party’s complete repudiation of a contract is enough to establish breach. Declaration of refusal to perform will amount to breach of contract. The court here found the pleading of repudiation sufficient.
“ . . . without stating a reason, or giving plaintiffs any opportunity to be heard, [the Metaldyne Board] declared the Amended SERP invalid.”