Are you an NCEO member? Learn more or sign up now.

Home » Publications »

ESOP and 401(k) Plan Employer Stock Litigation Review 1990-2016

(Print Version)

by Corey Rosen

This is the print version, and shipping charges apply. It also is available in a digital version with no shipping charges.
$75.00 for NCEO members; $150.00 for nonmembers

A 20% quantity discount will be applied if you are a member (or join now) and order 10 or more of this publication. If you need to order more than the maximum number in the drop-down list below, change the quantity once you have added it to your shopping cart.

This updated 74-page publication categorizes, describes, and summarizes 328 ESOP lawsuits (269 in private companies and 59 in public companies) between 1990 and 2016. Seventeen cases (all in private companies) were added for the 2016 edition, which is six pages longer than its predecessor. The publication also categorizes all the court decisions in 401(k) company stock cases from 1990 through mid-2016 and provides brief summaries for decisions starting in 2010. An appendix discusses what the Supreme Court's Dudenhoeffer decision has meant for ESOPs. We have tried to be comprehensive, but advisors must always supplement this with their own research.

If you aren't already a member, we encourage you to join (only $90 for 12 months) when ordering this to get the $75 member price; you can choose this as an option during checkout.

You also may be interested in our related publication ESOP Regulatory Rulings 1990-2016, which provides a summary of rulings and regulations on ESOPs and related plans.

Publication Details

Format: Perfect-bound book, 74 pages
Dimensions: 8.5 x 11 inches
Edition: 1st (August 2016)
Status: In stock


Special Note on the Presumption of Prudence Issue
Summary of ESOP Case Decisions
ESOP Cases
Claims Against Providers
Deferral of Gains Issues
Disclosure of Information
Employment Rights and Plan Eligibility Issues
ESOPs as a Takeover Defense
Executive Compensation
Indemnification and Insurance
Lenders as Fiduciaries
Management of Plan Assets: General
Management of Plan Assets: "Stock Drop" Cases (Including Presumption of Prudence)
Party-in-Interest Definitions
Plan Qualification
Qualification for Set-Asides
S Corporation Anti-Abuse Rules
Securities Law Issues Other Than Disclosure
Standard of Prudence After the 2014 Fifth Third Case
State Law Claims
Voting, Tendering Rights, and ESOP Governance Rights
Who Is a Fiduciary?
401(k) Cases
Claims Against Providers
Issues with Offering and Holding Company Stock Other than Presumption of Prudence
Presumption of Prudence Issues
Right to Jury Trial
Securities Law and Required Disclosure Issues: Disclosure May Be Required
Securities Law and Required Disclosure Issues: Disclosure May Not Be Required
Standard of Prudence After the 2015 Dudenhoeffer Case
Standing Affirmed for Participants
Standing Not Affirmed for Participants
Other Standing and Class Certification Issues
Who Is a Fiduciary?
Appendix: What the Supreme Court's Dudenhoeffer Decision Means for ESOPs
Key Points
Standard of Prudence
Effect on ESOPs


From "Distribution"

Del Rosario v. King & Prince Seafood Corp, No. 10-11967 (11th Cir. June 28, 2011, unpublished): An appeals court upheld the lower court's ruling that a change in distribution policy to provide for earlier payout did not violate ERISA and that plan communications to employees in the second of two contested periods also was not misleading. It remanded the case, however, over whether under the Amara doctrine, employees could make individual 502(a)(3) claims over whether they had been misled by plan communications in the first period. The case was settled out of court in 2012.

Beaston v. Sundt Companies, et al., No. 4:2009cv00551 (D. Ariz. Aug. 15, 2011): A district court rejected an argument that a plan committee's decision to reduce the time for stock distributions from two years to one year was a fiduciary violation. The court ruled the plan language allowed the plan committee discretion over these rules.

Perez v. Cal. Pac. Bank, No. 3:13-cv-03792-JD (N.D. Cal. July 20, 2015): A district court ruled that California Pacific Bank failed to properly distribute assets upon the termination of its ESOP. The DOL alleged, and the court agreed, that the bank had failed to pay out the participants in a timely fashion. The bank also moved plan assets into a non-interest-bearing account pending distribution, but the court said questions of fact remained about whether such a transfer was permissible.

Harper v. Conco ESOP Trs., No. 3:16-CV-00125-JHM (W.D. Ky. July 7, 2016). A district court ruled that employees of the bankrupt company Conco could not sell their stock for at least three years. The court affirmed a bankruptcy court's ruling that was meant to give the company an opportunity to reorganize. Employees had also sued fiduciaries over a failure even to consider an offer to buy the company for $2 million when the company's value was zero. Employees wanted to reopen the bankruptcy case, but the bankruptcy court ruled that the reorganization plan prohibited a sale. The plan specified that Conco could not repurchase the shares from employees before 2019.

From "Employment Rights and Plan Eligibility Issues"

Momchilov v. McIlvaine Trucking, No. 5:09CV1322 (N.D. Ohio Mar. 24, 2010): A district court denied a motion for summary judgment for the defendants and allowed the plaintiff to proceed with a claim that she was wrongfully discharged two weeks after requesting copies of ESOP plan documents.

Malcolm v. Trilithic, Inc., No. 1:13-cv-00073-SEB-DKL (S.D. Ind. Mar. 31, 2014): A court ruled that an executive who had been fired over allegations about abusive transactions in an ESOP could not contest his firing under ERISA because he failed to state sufficient facts.

Sexton v. Panel Processing, Inc., No. 13-1604 (6th Cir. May 9, 2014): A circuit court ruled that a single e-mail from an ESOP participant and plan trustee to the company's board chairman threatening to report violations of ERISA by the chairman in his handling of board elections did not give rise to an anti-retaliation claim under Section 510 of ERISA.