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"
