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In a recent blog post, Carol Buckmann wrote about a decision from a federal district court judge in Massachusetts calling into question a 2007 advisory opinion from the U.S. Pension Benefit Guaranty Corporation (PBGC). Tim Kiladze quoted Carol in a recent Globe & Mail article -“Pension ruling offers relief to private equity funds” – noting that the PBGC had created a furor in the investment and employee benefits worlds when it issued an appeals opinion finding that “pension funds that own 80 per cent or more of a portfolio company could be liable for plan under-funding in the event of a bankruptcy.”

The Massachusetts court took issue with the PBGC opinion, finding that it was not entitled to deference because it was “unpersuasive” and conflicted with U.S. Supreme Court authority. The Court went on to find that the funds at issue were not trades or businesses, as they had no employees or offices; rather they were simply passive pools of investment capital managed by a general partner.