Black Diamond Capital’s Layoff Trial Win Upheld by Fifth Circuit

A divided Fifth Circuit panel affirmed Black Diamond Capital Management LLC’s federal bench trial verdict finding the private equity firm isn’t liable for the 2019 closure of a Bayou Steel plant that left 300 employees fired without proper notice.

A Louisiana district judge “reasonably inferred” there’s no concrete evidence that Black Diamond, which owned Bayou Steel through a subsidiary, exerted de facto control directing the plant’s shuttering and mass layoff to be liable under the federal Worker Adjustment Retraining Notification Act, the US Court of Appeals for the Fifth Circuit held in a 2-1 unpublished opinion issued Monday. The subsidiary, ...