In a recent Ninth Circuit case, Carpenters Pension Trust Fund for Northern California v. Moxley, 2013 WL 4417594 (9th Cir. 2013), the court held that an employer's withdrawal liability was dischargeable in bankruptcy. In this case, the employer filed for bankruptcy protection after the Pension Fund assessed withdrawal liability. The Pension Fund objected to the discharge of the withdrawal liability, arguing that the employer was a fiduciary under the Bankruptcy Code and that the debt should not be discharged under an exception in the Bankruptcy Code applicable in cases of fraud or "defalcation" (misappropriation of funds). The Pension Fund argued that money owed to the Pension Fund under the terms of the collective bargaining agreement (CBA) constituted plan assets and, because the employer had control over the amounts to be contributed, it was a fiduciary to the Fund.

The court held that the employer was not a fiduciary with respect to uncontributed amounts, and the Bankruptcy Code exception did not apply.