Philadelphia and Wilmington partner Andy Kassner and associate Joe Argentina published an article in The Legal Intelligencer titled, “Private Equity Funds Liable for Pension Withdraw Liabilities - Part 2.”

It follows a previous article from three years ago about Sun Capital Partners III, LP v. New England Teamsters & Trucking Ind. Pens. Fund. In that case, the First Circuit Court of Appeals held that two private equity investment funds could be held liable for their bankrupt portfolio company’s withdrawal liability under the Employee Retirement Income Security Act (ERISA). The appeals court remanded the case to the District Court for additional proceedings to determine whether the investment funds were engaged in a “trade or business” and part of the same “control group” as the portfolio company.

In part 2, Andy and Joe discuss the decision on remand issued by Judge Douglas P. Woodlock of the District Court, who held the investment funds liable for the withdrawal liability. The article is of particular importance to those attorneys who represent private equity funds in acquisitions. The District Court held the funds liable even though the funds structured the acquisition to avoid 80 percent ownership by either fund of the operating company, the traditional trigger for ERISA liability.

Read: “Private Equity Funds Liable for Pension Withdraw Liabilities - Part 2

Source: The Legal Intelligencer
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