PE Firms Face Risk of Pension Fund Liability - Report

Private equity funds that did not look into the pension funding of their U.S. portfolio companies may now be facing a bill from the U.S. Pension Benefit Guaranty Corp. if companies fail, says a new report by Osler Hoskin & Harcourt LLP. Osler counsel Carol Buckmann adds that if companies are unionized, another bill might be coming from U.S. multi-employer pension plans if operations cease or are reduced. Both entities have been known to assert claims in Canadian proceedings as well as in the U.S. The risk emerges from a recent decision by the U.S. Court of Appeals that says private equity funds may be a “trade or business.”

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