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Our recent client alert provides an overview of a recent lower court case confirming the risks to commonly managed private equity funds when they collectively own directly or indirectly 80% or more of certain operating companies. On remand from the First Circuit, the District Court for Massachusetts held private equity funds managed by Sun Capital Advisors, Inc. liable for ERISA withdrawal liability owed by a bankrupt portfolio company to a multiemployer pension plan. The First…
The United States Court of Appeals for the D.C. Circuit recently affirmed a district court decision holding that the excise tax imposed under 26 USC § 4371 does not apply to wholly foreign retrocession contracts. The term “retrocession” refers to transactions in which one reinsurer buys or sells reinsurance to another reinsurer, and is sometimes referred to as “second-level” reinsurance (in contrast to the provision of reinsurance to an insurance company). The case, Validus Reinsurance, Ltd.…
The Internal Revenue Service (IRS) is considering two matters that are likely to be of considerable interest to managers of private equity funds, hedge funds and real estate funds – the tax treatment of management fee waivers and whether individuals can be employees and partners of the same partnership entity at the same time for tax purposes. For more detail, please see our recent alert.…