News & Analysis as of

Controlled Groups

Jackson Lewis P.C.

You Can Be Personally Liable For Withdrawal Liability Despite A Company’s Limited Liability Status

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Unionized employers participating in an underfunded multiemployer pension plan face significant financial exposure when withdrawing (completely or partially) from the plan. The cost (called “withdrawal liability”) is...more

Tucker Arensberg, P.C.

Third Circuit Affirms $96 Million Withdrawal Liability Award Against Renco

In a major win for the Steelworkers Pension Trust (SPT), the U.S. Court of Appeals for the Third Circuit upheld an award totaling $96 million in withdrawal liability and additional statutory penalties against the Renco Group,...more

Jackson Lewis P.C.

Withdrawal Liability – Real Property Presumed A Trade Or Business

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An employer’s permanent cessation of contributions to a multiemployer pension plan can trigger withdrawal liability. This liability may reach affiliated trades or businesses with sufficient common ownership to be under...more

Dickinson Wright

PE Funds Are Not Part of Controlled Group; What About Your Company?

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Earlier this month, the U.S. Supreme Court denied a request to review the First Circuit Court of Appeals decision in the Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund case, thereby...more

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

Make sure you deal with controlled and affiliated service group analysis

As a 401(k) plan sponsor, you need to make sure that all your plan providers understand any ownership interests in other companies that you may have and make a determination whether those interests constitute a controlled...more

Jones Day

Private Equity Update: 1st Circuit Reverses Imposition of Pension Plan Withdrawal Liability

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The Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA") amended the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code to make "trade[s] or business[es]" that are under "common...more

Katten Muchin Rosenman LLP

Recent Sun Capital Decision Provides Welcome Relief but Leaves Uncertainty

Key Points - The US Court of Appeals for the First Circuit reversed a lower court decision which held that two affiliated private equity funds with indirect ownership interests in the same portfolio company were liable for...more

Dechert LLP

Some Less Egregious Aggregation? – First Circuit Reverses the District Court in Sun Capital Partners

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The recent decision by the U.S. Court of Appeals for the First Circuit in the Sun Capital Partners case may allay some of the concerns that private-equity and other investment funds that acquire or invest in portfolio...more

White & Case LLP

In Limited Ruling, Sun Funds Avoid Liability for Portfolio Company Pension Obligations

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First Circuit: Two affiliated funds did not form an implied partnership liable for pension obligations of a portfolio company, but private equity funds can still be subject to controlled group pension liability...more

Morgan Lewis

First Circuit Appeals Court Reverses Finding of Controlled Group Pension Liability Due to ‘Partnership in Fact’

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The US Court of Appeals for the First Circuit recently reversed a prior decision of the US District Court for the District of Massachusetts, which had held that two private equity funds were trades or businesses in common...more

Foley & Lardner LLP

All in the Family – Why Controlled Group Rules Matter

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It’s the time of year when we all gather around with our families and loved ones.  It’s also a good time to remember that your company may have its own family.  Forgetting about that family can spell trouble....more

McDermott Will & Emery

Finally! First Circuit Overturns the Sun Capital ERISA Multiemployer Plan Liability Case—But Risks Remain for Private Equity

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The First Circuit issued a decision holding that two private equity funds involved in a case are not required to pay for the withdrawal limit of a portfolio company. Despite the limited victory, the guiding rule with respect...more

Proskauer - Employee Benefits & Executive...

Sun Capital Update: First Circuit Reverses District Court’s “Partnership-in-Fact” Holding and Finds Private Equity Funds Not Part...

Last Friday, the U.S. Court of Appeals for the First Circuit ruled that two co-investing Sun Capital private equity funds (the Sun Funds) had not created an implied “partnership-in-fact” for purposes of determining whether...more

Verrill

IRS Guidance Regarding the Section 4960 Excise Tax Is (Somewhat) Helpful

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IRS Notice 2019-09 provides guidance intended to help “applicable tax-exempt employers” determine whether compensation paid to their most highly compensated employees will be subject to the 21 percent excise tax imposed under...more

Verrill

Controlled Group Rules for Tax Exempt Organizations: A Brief Review

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Corporate entities under common control are generally treated as a single employer for purposes of applying the core rules that govern employee benefit plans and executive compensation arrangements. For that reason, a...more

Proskauer Rose LLP

Sun Capital Redux: Private Equity Fund Seeks Declaratory Judgment on Controlled Group Liability for Portfolio Company's Pension...

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In light of the recent decisions by the U.S. Court of Appeals for the First Circuit and the U.S. District Court for the District of Massachusetts in Sun Capital, private investment funds, multiemployer pension funds and the...more

Latham & Watkins LLP

FAQ: Recent Developments in US Law Affecting Pension and OPEB Claims in Restructurings (2017)

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From theory to practice, planning to enforcement, the answers to 42 of the most frequently asked questions can help you prepare, cope or respond to a restructuring. This Client Alert answers some of the most frequently asked...more

Latham & Watkins LLP

Canadian Court Dismisses ERISA “Controlled Group” Claim

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Decision creates a substantial barrier to controlled group claims in Canada, may provide a template for other jurisdictions. Key Points: ..ERISA controlled group liability is joint and several for all members of a pension...more

McDermott Will & Emery

Structuring Private Equity Deals in 2017: Considerations for Buyers While They Wait for the Sun Capital Appeals to Play Out

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Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund has been analyzed extensively over the past four years, as it has made its way from the US District Court for the District of...more

Mintz

Mass. District Court Holds Private Equity Funds Liable for a Portfolio Entity’s Pension Benefits

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The Private Equity Practice has been getting an increasing number of calls related to the decision made earlier this spring (Sun Capital Partners III, LP v. New Eng. Teamsters & Trucking Indus. Pension Fund, 2016 US Dist....more

Proskauer Rose LLP

The ERISA Litigation Newsletter - May 2016

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Editor’s Overview - In this issue of Proskauer's ERISA Litigation Newsletter, we review a recent ruling by the Tenth Circuit Court of Appeals concerning the application of controlled group principles to the building...more

Foley & Lardner LLP

Attention Taxpayers: New IRS Rules May Deem Debt to Be Stock

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In April, the IRS proposed rules that would treat debt between related corporations as stock for U.S. tax purposes. These rules would apply to all corporations (including regular C corporations, S corporations, foreign...more

Baker Donelson

New "Inversion" Proposed Regulations Inspired By The Pfizer/Allergan Deal May Impact Corporate Tax Planning Strategies

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The Treasury Department has recently promulgated proposed regulations dealing with so-called inversion transactions. Inversion transactions are ones in which a U.S. corporation changes its domicile to a nation with a more...more

Foley & Lardner LLP

IRS Rules Could Treat Related Party Debt as Stock

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Multinational groups can strip U.S. earnings away from U.S. taxation by having a domestic corporation issue debt and pay earnings out to foreign affiliates as deductible interest. This strategy could be used after an...more

Proskauer Rose LLP

The ERISA Litigation Newsletter - April 2016

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Editor's Overview - This month we feature three key developments. First, we review the U.S. Supreme Court's decision in Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 947 (2016) wherein the Supreme Court held that a...more

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