The NY Times has an interesting article "Ruling on Pension Fund Debt Could Shake Up Private Equity Industry" that is worth a read. A federal District Court in Massachusetts has held that two separate private equity funds were jointly liable for the pension fund debt of one of their portfolio companies Scott Brass. The case revolves around some unique facts and some interpretations of ERISA, the law governing these retirement plans, but it could deter private equity firms from acquiring companies with unfunded pension liabilities. Time will tell.
Links:
NY TImes (general overview):
http://www.nytimes.com/2016/04/22/business/dealbook/ruling-on-pension-fund-debt-could-shake-up-private-equity-industry.html
White & Case article (legal analysis):
http://www.whitecase.com/publications/alert/private-equity-funds-held-liable-pension-obligations-portfolio-company
Links:
NY TImes (general overview):
http://www.nytimes.com/2016/04/22/business/dealbook/ruling-on-pension-fund-debt-could-shake-up-private-equity-industry.html
White & Case article (legal analysis):
http://www.whitecase.com/publications/alert/private-equity-funds-held-liable-pension-obligations-portfolio-company
