Patrick Fenn Quoted by BNA on 1st Circuit Sun Capital Decision
BNA’s Pensions and Benefits Daily, in its coverage of a panel discussion—“Private Equity as a Trade or Business: The Sun Capital Decision”—hosted by Tax Analysts, quoted remarks by Akin Gump tax partner Patrick Fenn on the 1st Circuit’s decision in this matter.
The case, Sun Capital Partners III LP v. New England Teamsters & Trucking Indus. Pension Fund, decided that a general partner of a Sun Capital fund “was engaged in a trade or business and was therefore liable for the unpaid multiemployer pension withdrawal liability under one of its portfolio companies.”
In reaction to the court’s findings, Fenn noted, “I wouldn't have thought that that type of activity… that the investor undertakes to protect, manage, and enhance the value of its investment” would result in the finding of an active trade or business.
The article also quotes Fenn on, among other topics, policy considerations of the case as well as the tax implications of turning all PE activities into a regular trade or business.