NCEO founder and senior staff member
Corey Rosen
In Jones v. Zander Grp. Holdings, No. 8:24CV428 (D. Neb. May 27, 2025), a district court ruled that defendants at ESOP-owned Zander Group Holdings cannot subpoena the attorneys for the plaintiff or communications between the attorneys and the plaintiffs.
Corey Rosen
A three-judge panel for the 11th Circuit Court of Appeals said that they were bound by the precedent in the circuit that plaintiffs had to exhaust their remedies under the plan documents prior to proceeding with litigation.
Corey Rosen
ESOP legal experts suspect that the recent unanimous Supreme Court decision in Cunningham v. Cornell University, No. 23-1007 (U.S. Apr. 17, 2025) will make it easier for plaintiffs to file lawsuits against ESOP fiduciaries. The issue in Cornell related to ERISA’s prohibited transaction provisions and the many statutory exemptions.
Corey Rosen
ESOP legal experts suspect that the recent unanimous Supreme Court decision in Cunningham v. Cornell University, No. 23-1007 (U.S. Apr. 17, 2025) will make it easier for plaintiffs to file lawsuits against ESOP fiduciaries.
Corey Rosen
A $580,000 settlement was reached in Arnold v. Paredes, No. 3:23-cv-00545 (M.D. Tenn., Apr. 17, 2025). Plaintiffs at Churchill Mortgage, an 800-employee company, alleged that part of the dividends paid on shares held by the 100% ESOP were used to offset required employer contributions to the plan.
Corey Rosen
A district court ruled on all counts for defendants in a case involving the sale of the Segerdahl Corporation.
Corey Rosen
A settlement has been reached in Jackson v. New England Biolabs Inc., No. 1:23-cv-12208-RGS (Feb. 14, 2025). The company had an ESOP until 2013, which it converted to a profit-sharing plan.
Corey Rosen
In Lysengen v. Argent Trust, et al., No. 1:20-cv-01177MMM-JEH (D.C. Ill. May 9, 2025), a court approved a $4 million settlement in a lawsuit over a 50% drop in the value of Morton Buildings in the year following the company’s taking on debt to fund the ESOP. The plan initially owned a minority of the shares in the company.
Corey Rosen
In Ramirez et. al. v. AMPAM Parks Mech., Inc., No. EDCV 24-1038-KK-DTBx (C.D. Cal. Feb. 14, 2025), employees moved forward with most of their claims against AMPAM Parks Mechanical and the plan’s trustee. The lawsuit alleges the company’s ESOP overpaid for the stock, which was sold for a depressed price.
Corey Rosen
In Dalton v. Freeman, No. 2:22-cv-00847-DJC-DB (E.D. Cal. Mar. 24, 2025), a court ruled plaintiffs had not pled a specific enough case against Alerus, which was acting as a trustee at O.C. Communications when the ESOP company was sold.
