Asahi ruling confirms pension liability risks for cross-border PE firms - report

A decision by Washington's federal district court concerning Japan's Asahi confirms risks for private equity funds that did not look into the pension funding of their U.S. portfolio companies, reports Carol Buckmann, counsel at Osler Hoskin & Harcourt LLP. Along with another decision concerning Sun Capital Partners that found private equity funds could be trades or businesses for purposes of U.S. Pension Benefit Guaranty Corp liability, non-U.S. funds should "assess the risk that their activities make them a trade or business, ramp up their diligence of portfolio companies and determine the appropriate ownership levels and contractual protections for their U.S. portfolio company investments."

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