FOR IMMEDIATE RELEASE
Monday, September 14, 2020
Contact: Pamela Russell at 202-618-6433 or prussell@bettermarkets.com
Washington, D.C. – Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the filing of a friend-of-the-court brief with the Supreme Court in support of a petition for certiorari filed in New England Teamsters & Trucking Industry Pension Fund v. Sun Capital Partners III, LP (20-155):
“In this case, workers of a now-bankrupt company are seeking to hold two private equity funds that took over the firm accountable for a shortfall in their pension plan. In our brief filed today, Better Markets urges the Supreme Court to review the case so the employees won’t be penalized and receive far less than they were promised in retirement.
“It’s clear that the two private equity funds are attempting to escape liability based on the claim they didn’t really run the operation, even though the facts clearly show the opposite. Unfortunately, the First Circuit bought their argument, downplaying the private equity funds’ de facto control and focusing instead on fine print disclaimers in the paperwork governing the takeover. The court also worried that imposing liability on the private equity funds would discourage private investment in struggling companies.
“But as we argued in our brief, the lower court was wrong on both counts. Congress passed the retirement plan reforms in ERISA not to encourage private investment in companies but to protect the retirement security of all Americans. The way to serve that goal is to hold private equity funds accountable if they run an operation, not let them walk away. Moreover, the lower court violated one of the most basic legal principles, which holds that statutes like ERISA are supposed to be interpreted broadly with an eye to the economic realities of a situation, not in a way that lets technical and evasive arguments control the application of the law.
“The Supreme Court has an opportunity not only to help these workers restore their pension plan benefits but also lay down the law and make clear that such attempts by the private equity industry to shirk its duty won’t be tolerated. We’ll be watching the docket during the upcoming term to see if the Court grants the petition and agrees to hear the case.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
