In a March 2016 ruling that could force private equity firms to reconsider how they structure their portfolio company investments, a US federal district court in Massachusetts found two private equity funds responsible for a multimillion-dollar multiemployer pension plan withdrawal liability incurred by the portfolio company that was jointly owned by the funds. Notwithstanding the funds’ ownership structure, the court ruled that the funds had formed a partnership-in-fact and thus were liable under the “controlled group” rules within the Employee Retirement Income Security Act of 1974 (ERISA).
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