§ 4043.30. Liquidation.
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/us/cfr/t29/s§ 4043.30·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Reportable event. A reportable event occurs for a plan when a member of the plan's controlled group---
(1)Resolves to cease all revenue-generating business operations, sell substantially all its assets, or otherwise effect or implement its complete liquidation (including liquidation into another controlled group member) by decision of the member's board of directors (or equivalent body such as the managing partners or owners) or other actor with the power to authorize such cessation of operations, sale, or a liquidation, unless the event would be reported under paragraph (a)(2) or
(3)of this section;
(2)Institutes or has instituted against it a proceeding to be dissolved or is dissolved, whichever occurs first; or
(3)Liquidates in a case under the Bankruptcy Code, or under any similar law.
(b)Waivers---(1) De minimis 10-percent segment. Notice under this section is waived if the person or persons that liquidate under paragraph
(a)of this section do not include any contributing sponsor of the plan and represent a de minimis 10-percent segment of the plan's controlled group for the most recent fiscal year(s) ending on or before the date the reportable event occurs.
(2)Foreign entity. Notice under this section is waived if each person that liquidates under paragraph
(a)of this section is a foreign entity other than a foreign parent.
(3)Reporting under insolvency event. Notice under this section is waived if reporting is also required under § 4043.35(a)(3) or
(4)and notice has been provided timely to PBGC for the same event under that section.
(c)Public company extension. If any contributing sponsor of the plan, or the parent company within a parent-subsidiary controlled group of such contributing sponsor, is a public company, the due date for notice under this section is extended until the earlier of---
(1)The date the contributing sponsor or parent company timely files a SEC Form 8-K disclosing the event under an item of the Form 8-K other than under Item 2.02 (Results of Operations and Financial Condition) or in financial statements under Item 9.01 (Financial Statements and Exhibits); or
(2)The date when a press release with respect to the liquidation described under paragraph
(a)of this section is issued in the U.S. in the English language.
(d)Examples---(1) Liquidation within a controlled group. Plan A's controlled group consists of Company A (its contributing sponsor), Company B, Company Q (the parent of Company A and Company B). Company B represents the most significant portion of cash flow for the controlled group. Company B experiences an unforeseen event that negatively impacts operations and results in an increase in debt. The controlled group liquidates Company B by ceasing all operations, settling its debts, and merging any remaining assets into Company Q. (For purposes of this example, it does not matter under which of paragraphs (a)(1) through
(3)of this section reporting is triggered). The transaction is to be treated as a tax-free liquidation for tax purposes. Both Company A (Plan A's contributing sponsor) and the plan administrator of Plan A are required to report that Company B will liquidate within the controlled group.
(2)Cessation of operations. Plan A is sponsored by Company A. The owners of Company A decide to cease all revenue-generating operations. Certain administrative employees will wind down the business and continue to be employed until the wind down is complete, which could take several months. Company A is required to report a liquidation reportable event 30 days after the decision is made to cease all revenue-generating operations.
(3)Sale of assets. Plan A is sponsored by Company A. In a meeting of the Board of Directors of Company A, the Board resolves to sell all the assets of Company A to Company B. Under the asset sale agreement with Company B, Company B will not assume Plan A; Company A expects to undertake a standard termination of Plan A. Company A is required to report a liquidation event 30 days after the Board resolved to sell the assets of Company A. \[85 FR 6063, Feb. 4, 2020\]
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§ 4043.30
Liquidation.
Fed. Reg.×2
C.F.R.×1
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