Law360: NY Hotel Worker Pension Says Roosevelt Owner Owes $24M

By CRAIG CLOUGH

November 18, 2021 8:53 PM

 

A pension trust fund for a hotel workers’ union sued the owner of New York’s Roosevelt Hotel for more than $24 million in federal court on Wednesday, claiming the company owes withdrawal liability after permanently ceasing covered operations under the plan.

 

RHC Operating LLC needs to pay the funds under at least three sections of the Employee Retirement Income Security Act, but the company did not respond to the trust when informed of its payment obligation, according to the complaint. The iconic Roosevelt Hotel shut down late last year after nearly a century in operation.

 

“More than 60 days have elapsed since RHC Operating received the default letter,” the trust said. “RHC has failed and/or refused to make any withdrawal liability payments to the pension fund since then and to date.”

 

The trustees of the New York Hotel Trades Council and Hotel Association of New York City Inc. Pension Fund filed the suit against RHC Operating, the Roosevelt Hotel Corp. NV, PIA Investments Ltd. and Pakistan International Airlines Corp. Ltd.

 

PIA is the sole owner of the Roosevelt Hotel Corp. and PIA is a wholly owned subsidiary of Pakistan International Airlines, according to the fund. PIA was formed under United Arab Emirates laws and registered under British Virgin Islands laws, the complaint said.

 

In or around December 2020, RHC Operating permanently ceased covered operations under the plan and became liable to the fund for withdrawal liability of $24,560,679, according to the fund.

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RHC Operating was notified in a January letter that it owes a withdrawal amount equal to a single payment of the withdrawal liability or 45 quarterly installment payments of $754,147.25 each and a final payment of $540,578.01, with the first installment due in March, according to the complaint.

 

This month, the fund notified RHC Operating it was in default and demanded immediate payment of the entire amount of the withdrawal liability plus interest, the trust said. 

 

RHC could not be reached for comment. Counsel for the trust did not immediately respond to requests for comment.

 

The pension fund trustees are represented by Barry N. Saltzman and Andrew D. Midgen of Pitta LLP.

 

Counsel information for the defendants was not immediately available.

 

The case is The Trustees of the New York Hotel Trades Council and Hotel Association of New York City Inc. Pension Fund v. RHC Operating LLC et al., case number 1:21-cv-09538, in the U.S. District Court for the Southern District of New York.