Private Equity Newsletter
October 05, 2016
This edition of Dechert’s Private Equity Newsletter reviews recent developments in private equity worldwide, including:
- Do You Know Who Your Employees Are? Joint Employer Liability Under the FLSA and Other Employment Laws
- Antitrust Updates for Private Equity Firms
- HIPAA Compliance – Not Just an Issue for Health Care Providers
- Recent Developments in Acquisition Finance
Do You Know Who Your Employees Are? Joint Employer Liability Under the FLSA and Other Employment Laws
As private equity firms become more involved in the operations of their portfolio companies, they are increasingly at risk of being deemed joint employers of their portfolio companies’ employees, leaving private equity firms jointly and severally liable for violations of employment laws and vulnerable to disruptive obligations ranging from ongoing litigation to potential union bargaining obligations.
Antitrust Updates for Private Equity Firms
In an era of robust merger enforcement by the U.S. antitrust agencies, opportunities abound for private equity firms to acquire divested businesses for value. These acquisitions of divested businesses are increasingly subject to review by the agencies prior to the closing of the main transaction, and private equity buyers should be well-prepared to demonstrate to the parties, and then again to the agencies, how they will ensure that the divested business will replace any competition lost between the parties. Private equity buyers should also account for the increased length of government merger investigations in their deal analysis.
HIPAA Compliance – Not Just an Issue for Health Care Providers
Many people believe that compliance with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) is solely an issue for health care providers and their affiliates. However, nothing could be further from the truth. As described below, any employer that sponsors a self-insured group health plan for its employees will have substantial HIPAA compliance obligations and the failure to satisfy such obligations can have significant adverse consequences.
Recent Developments in Acquisition Finance
A recent Delaware bankruptcy court decision may potentially place at risk an equity sponsor’s ability to retain proceeds from the sale of a portfolio company whose performance later deteriorates, where the selling sponsor acted in bad faith and the portfolio company was or became insolvent at the time of or on account of the sale.
Related Professionals
