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Sun Capital Partners

First Circuit holds private equity fund potentially liable for portfolio company pension obligations


On July 24, 2013, the United States Court of Appeals for the First Circuit issued a decision in Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, 2013 U.S. App. LEXIS 15190 (1st Cir. 2013) (“Sun Capital”), which addressed whether the private equity partnership litigants in the case were in “trades or businesses” for purposes of liability under Title IV of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension Plan Amendment Act of 1980 (“MPPAA”). Reversing a decision by a federal district court in Massachusetts (the “District Court”), the First Circuit held that one of the investing funds was more than a mere passive investor and therefore was engaged in a trade or business for purposes of ERISA. The First Circuit remanded for additional fact finding with respect to the second fund. On August 7, 2013, the two investing private equity funds in this case filed a petition for a rehearing with the First Circuit. The petition has since been denied.

Please download the PDF to read more about the significance of the case, the issue it presents and the potential discussion items that have been prompted by this Court ruling.

Contact information

For additional information or questions, please contact:

James Calzaretta
Tax Partner, Washington National Tax
Deloitte Tax LLP
+1 312 486 9138
  Ted Dougherty
National Managing Partner, Asset Management Tax
Deloitte Tax LLP
+1 212 436 2165


This alert contains general information only and Deloitte is not, by means of this alert, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This alert is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this alert.


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