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Left to right: Andrew Kassner and Joseph Argentina of Drinker Biddle & Reath. Left to right: Andrew Kassner and Joseph Argentina of Drinker Biddle & Reath.

As the old saying goes, “the wheels of justice turn slowly.” We return today to Sun Capital private equity funds’ multiyear litigation defending against unfunded pension liability related to one if its portfolio companies. We first reported on this controversy in an article in the Legal Intelligencer in 2013. At that time, the U.S. Court of Appeals for the First Circuit held the Sun Capital funds could be engaged in a “trade or business,” one of the requirements for pension withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980 (the MPPAA), and remanded the case to the U.S. District Court for the District of Massachusetts for additional proceedings. In 2016, the district court held that the Sun Capital funds were liable because the funds were engaged in trade or business and had formed a partnership-in-fact, thereby meeting the “common control test” under MPPAA law. In a decision dated Nov. 22, the First Circuit found the funds did not constitute an implied partnership-in-fact, reversed the decision of the district court, and held withdrawal liability could not be imposed. The opinion appears as Sun Capital Partners III v. New England Teamsters & Trucking Industry Pension Fund, Case No. 16-1376 (1st Cir. Nov. 22, 2019).

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