The First Circuit Court of Appeals has recently held in Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund (July 24, 2013), a case of first impression at the Circuit Court level, that a private equity fund that exercises sufficient control over a portfolio company may be considered a "trade or business" for purposes of Title IV of the Employee Retirement Income Security Act of 1974 (ERISA). This means that the fund and any of its 80 percent or more owned portfolio companies would be part of an ERISA controlled group and, accordingly, jointly and severally liable for the defined benefit pension obligations of any member of the controlled group.
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