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Don’t Fly Too Close to the Sun (Funds): Investor Withdrawal Liability and Multiemployer Funds  


Author:  Elliot Dater.; Jon Hughes.


Source: Volume 30, Number 01, Fall 2016 , pp.33-42(10)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

A recent federal district court decision should cause private equity firms to reconsider acquisition structure, fee structure, management, and control issues with respect to portfolio companies that either have contributed to or are contributing to multiemployer pension plans. The Sun Funds case resulted in withdrawal liability being attributed to private equity firms that followed traditional methods. Private equity firms that want to avoid incurring a similar fate will need to consider everything from valuation, to control, to management structure.

Keywords: withdrawal liability; private equity; Sun Funds cases; multiemployer pension funds; investment plus test

Affiliations:  1: Schnader Harrison Segal & Lewis; 2: Schnader Harrison Segal & Lewis.

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