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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.
On August 7, 2013, Sun Capital filed a petition with the First Circuit for a panel rehearing or a rehearing en banc. On August 23, 2013, the petition was denied