Cleary Gottlieb won in Connecticut federal court a motion to dismiss a lawsuit against Union Carbide Corporation and its pension plan on January 25. Praxair, which Union Carbide spun off in 1992, claimed that it had a right under three pension plan-related contracts with Union Carbide to insurance company demutualization proceeds received by Union Carbide from Prudential Insurance Company of America in 2002. In dismissing ERISA fiduciary duty claims against co-defendants The Dow Chemical Company and Prudential, the court ruled that the demutualization proceeds were not plan assets at the time of the spinoff because the proceeds did not exist until the actual demutualization process, and therefore, the Praxair plan participants had no rights to the proceeds.
The court dismissed all of Praxair’s state law claims against Union Carbide for lack of subject matter jurisdiction.
