The US Court of Appeals for the First Circuit recently delivered a potentially far-reaching decision for the private equity industry. In a case which involved a typical private equity structure, Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund, et al., the First Circuit adopted a broad view of what constitutes a “trade or business” for purposes of determining whether a private equity fund (and its portfolio companies) is a “controlled group” that can be held jointly liable for withdrawal liability from a multiemployer pension fund where one of the fund’s portfolio companies withdraws from the fund.
Continue Reading

The US Supreme Court recently declined to review the “stock drop” cases decided late last year by the US Court of Appeals for the Second Circuit involving Citigroup and McGraw-Hill. Patrick L. Gearren, et al. v. The McGraw-Hill Companies, Inc., et al., No. 11-1550 and Stephen Gray, et al. v. Citigroup Inc., et al., No. 11-1531. This allows to stand two decisions which are very favorable to the defense of fiduciaries of certain retirement plans that invest in company stock.


Continue Reading

Plaintiffs’ lawyers have recently attempted to convert a negative shareholder advisory “say on pay” vote under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) into a breach of fiduciary duty where the board of directors implements a compensation program and awards thereunder. A U.S. district court in Oregon has rejected such a claim on procedural grounds, applying Delaware corporate law in affirming the business judgment presumption for the directors’ vote. Plumbers Local No. 137 Pension Fund v. Davis.


Continue Reading

Co-authored by Christopher K. Buch

On May 16, the U.S. Supreme Court issued its long-awaited opinion in the case of Cigna Corp. v. Amara. This decision will have a substantial impact on plan sponsors, both with respect to how a sponsor is to design its plan and disclose terms in its summary plan description, as well as what relief may be available for plan participants and beneficiaries for plan violations.


Continue Reading