Party in interest question

[k man]

ERISA says a party in interest is, among other things, a 10 percent or more (directly or indirectly in capital or profits) partner or joint venturer with a person that is an owner of 50% of more of the stock of the employer. i am paraphrasing for brevity. our client loaned money to someone who is a 10 percent partner in a completely unrealted venture. when interpreting this provision do they mean ANY venture or the specific business that is the employer?

[Kirk Maldonado]

If my memory serves me right (and it often doesn't), you may find some useful guidance in DOL Advisory Opinion 75-147.

[Blinky the 3-eyed Fish]

Kman, it seems from your question that the money was loaned to a completely unrelated person who happens to own 10+% of a completely unrelated entity. If that is right, of course this guy isn't a party-in-interest.

[k man]

blinky, that is incorrect. the fiduciary/lender is a 10% partner with the borrower in an unrealted venture. since the lender is a 50% owner of the employer than sponsors the plan i believe that the borrower is a disqualified person.