White Paper / Employee Benefits
Trial Court Finds Private Equity Funds to be Informal Partnership

A federal trial court judge has tossed another ERISA hand grenade into the world of private equity, concluding that two related private equity funds are not only “trades or businesses,” rather than mere investment vehicles, but also informal partners with respect to their ownership of a bankrupt portfolio company. The ruling means both funds are jointly and severally liable for millions of dollars in contributions owed by the portfolio company to a union-affiliated pension fund.

This decision may still be appealed and therefore is not definitively resolved. Even so, the ruling is a warning to the private equity community to exercise caution when acquiring  companies with current or potential liability to union-affiliated funds.

In a new white paper, Lockton Benefit Group’s Director of Private Equity and Corporate Acquisitions and our Co-Directors of Compliance Services tell you what you need to understand about this decision.

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