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Aug 14, 2013

Private Equity Funds May Be on the Hook for the Pension Liabilities of Portfolio Companies

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A recent decision of the Court of Appeals for the First Circuit makes it more likely that private equity funds could be liable for the pension obligations of the portfolio companies in which they invest. Key to the decision was the Court’s conclusion that the private equity fund in question was a “trade or business” by virtue of its active role in the management of the business of its portfolio companies. The decision, if applied broadly, will have implications for the drafting of fund documents, the structuring of fund investments, and the role that fund professionals play in managing the business of their portfolio companies.

View full memo, "Private Equity Funds May Be on the Hook for the Pension Liabilities of Portfolio Companies"

Authors and Contributors

John J. Cannon III

Partner

Compensation, Governance & ERISA

+1 212 848 8159

+1 212 848 8159

New York

Doreen Lilienfeld

Partner

Compensation, Governance & ERISA

+1 212 848 7171

+1 212 848 7171

New York

Kenneth J. Laverriere

Partner

Compensation, Governance & ERISA

+1 212 848 8172

+1 212 848 8172

New York

Linda Rappaport

Of Counsel

Compensation, Governance & ERISA

+1 212 848 7004

+1 212 848 7004

New York