District Court Rules Investment Funds Not Liable for Employer’s Withdrawal Liability

Two investment funds that invested in an employer that withdrew from a multiemployer pension plan cannot be liable for the employer’s withdrawal liability, the U.S. District Court for the District of Massachusetts held Oct. 18 (Sun Capital Partners III L.P. v. New England Teamsters and Trucking Industry Pension Fund, D. Mass., 1:10-cv-10921-DPW, 10/18/12).

Judge Douglas P. Woodlock concluded that the funds’ one-time investment in the employer’s company did not constitute sufficiently continuous or regular activity to render the funds “trades or businesses” under common control with the withdrawing employer. As a result, the pension plan could not seek ...