Delaware Bankruptcy Judge Declines to Order Arbitration of Key Pension Claims

By Lisa M. Schweitzer and Emily P. King (Cleary Gottlieb Steen & Hamilton)

In an opinion issued on March 27, 2024, in the In re Yellow Corporation, et. al. case, Judge Craig T. Goldblatt denied motions filed by multiemployer pension funds to arbitrate debtors’ objections to pension withdrawal liability claims in the United States Bankruptcy Court for the District of Delaware.

This decision notably departs from courts’ longstanding tendency to enforce arbitration clauses, and rests on the court’s finding that the importance of the resolution of the claim to the larger case outcome and the value of the bankruptcy process counsel in favor of keeping such claims in bankruptcy court. The court’s opinion in In re Yellow Corporation illustrates a willingness for the bankruptcy court to apply a thoughtful case-by-case analysis in considering whether to keep a dispute even where a competing federal statute mandating arbitration exists. This article will examine Judge Goldblatt’s decision and its implications. 

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