DB plan spinoff--can they be dissallowed due to funding status?

[Guest meggie]

We are in the process of determining the liability and assets (4044 calc) for a DB plan spinoff in conjunction with a sale.

The potential buyer is getting cold feet because of the fact that the seller's pension plan is underfunded. The potential buyer claims that when it entered into a similar transaction with a different seller, the DOL said that there could not be any transfer of plan liabilities and spinoff of plan assets unless the plan was fully funded.

Our client (seller) thinks that the DOL issued this ruling in the case of the earlier transaction in the form of a news release or advisory opinion.

Since we are not the service provider for the potential buyer, we cannot request more information on that earlier situation.

Has anyone run accross this situation? Does anyone recall seeing a DOL release on spinoffs and situations where the DOL would not sanction a spinoff? Thanks.