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Sun Capital Partners Decision Expands the Risk to Private Equity Funds of Incurring Portfolio Company Pension Liabilities

by Cadwalader Wickersham Taft LLP - New York Office

August 30, 2013

Previously published on August 28, 2013

The First Circuit recently held that, in some cases, a private equity fund could be found to engage in a “trade or business,” and therefore be subject to joint and several liability for withdrawal liability assessed against the fund’s portfolio company by a multiemployer pension plan. The ruling in Sun Capital Partners III LP v. New England Teamsters & Trucking Industry Pension Fund, issued July 24, 2013, potentially presents a new challenge for private equity funds as they invest in portfolio companies with contingent pension liabilities.


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