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In its recent decision in Heavenly Hana, the court held a private equity group that purchased a hotel and related assets was liable for the employees’ pension benefit plan’s withdrawal liability because the group had “constructive notice” of the withdrawal. As a key takeaway, asset purchasers can no longer rely on the seller’s representations on the funded status of the multiemployer pension plans and whether withdrawal liability exists. Under the constructive notice standard, asset purchasers are deemed to have knowledge of unfunded liability if due diligence or reasonable care would cause the discovery.

Heavenly Hana – Case No. 16-15481