concurring:
I agree with the majority opinion that there has been no violation of the fiduciary duties under ERISA. Nonetheless, I write separately because I am troubled by Sanwa’s dual status as trustee and creditor (with priority over the pension and profit sharing plans). The problem is that the debt owed by Supreme to Sanwa has priority over the plans’ claim; and there are only enough assets in Supreme to pay Sanwa. This dual loyalties problem will arise whenever a secured creditor becomes trustee to a plan that *471holds a claim which is subordinated to the creditor/trustee’s claim.
I would prefer to resolve this ease by focusing on the ERISA requirements for establishing an employee benefit plan.1 An employee benefit plan must be established by a written instrument that provides for one or more “named fiduciaries.” 29 U.S.C. § 1102(1); § 1102(2) (defining a named fiduciary as “a fiduciary who is named in the plan instrument”). Furthermore, “all assets of an employee benefit plan shall be held in trust by one or more trustees. Such trustee or trustees shall be either named in the trust instrument or in the plan instrument ... or appointed by a person who is a named fidu-ciary_” 29 U.S.C. § 1103(a) (emphasis added).
In this ease, Friend was trustee of the plans from their creation in 1977, and he apparently “appointed” Sanwa as trustee in July 1990. According to his declaration, Friend knew that, as compared to the plans, Sanwa’s claim against Supreme’s assets was superior to the plans’ claim, but he did not understand that Sanwa’s creditor status created a conflict of interest. (Friend Decl. ¶¶ 20, 24, 46).
As a preliminary matter in every case, we should focus on whether the terms of the trust agreement allow the original trustee to appoint a particular entity as successor trustee. In this ease, the record reveals that Sanwa’s appointment as successor trustee might have constituted a breach of the trust agreement. The trust agreement provides that the employer (Carson Lighting) shall appoint a trustee and that the Board shall designate any successor trustee upon death, removal or resignation of a trustee. (Retirement Trust, Art. II, § 2.1; Art. VI, § 6.2). Nowhere do the documents grant Friend, as named fiduciary and trustee, authority to appoint a new trustee. If Carson Lighting agreed to Sanwa’s appointment as successor trustee, there would be no breach, and there would be no conflict of interest problem because the trustor may appoint a trustee with divided loyalties.
The conflict of interest problem will arise when a named fiduciary (e.g., a trustee) appoints a successor trustee, and the trust agreement does not specify any guidelines for the selection procedure. In such cases, where § 1103(a) authorizes a named trustee to select a successor trustee without the employer-trustor’s consent, we must insure that the selection does not create conflicts of interest that are unforeseen by the trustor, the original trustee, or the beneficiaries. A potential successor trustee should be required to disclose fully to the original trustee any conflicts of interest. A disclosure requirement would prevent a successor trustee such as Sanwa from holding unforeseen dual loyalties. If the original trustee then consents to the conflict, then the successor trustee’s status as trustee would be immune from challenge.
A disclosure requirement makes sense especially because the original trustee would remain accountable as a fiduciary for having selected a successor trustee. The original trustee would be liable to the beneficiaries and the plan for giving consent, if consent amounted to a violation of the § 1104(1)(B) prudent man standard of care. Certain district courts have held a trustee liable for breach of fiduciary duty where he resigned without arranging for a suitable and trustworthy replacement. E.g., PBGC v. Greene, 570 F.Supp. 1483, 1488 (W.D.Pa.1983) (trustee’s “resignation is valid only when he has made adequate provision for continued prudent management of assets”), ajfd, 727 F.2d 1100 (3d Cir.), cert. denied, 469 U.S. 820, 105 S.Ct. 92, 83 L.Ed.2d 38 (1984); Freund v. Marshall & Isley Bank, 485 F.Supp. 629 (W.D.Wisc.1979) (same). Trustee liability likely would exist for example, where the newly-appointed successor was involved presently or imminently in a transaction with the plan. Full disclosure of conflicts would assist the original trustee in making an informed *472selection and in avoiding subsequent liability. I therefore urge disclosure in future cases.
. The profit sharing and defined benefit pension plans in this case are employee benefit plans. An employee benefit plan is "any plan, fund, or program ... established or maintained by an employer ... to the extent that [it] — (i) provides retirement income to employees, or (ii) results in a deferral of income by employees....” 29 U.S.C. § 1002(2), (3).