Corey Rosen
World Travel ESOP Settlement Approved
In Ahrendsen, et al. v. Prudent Fiduciary Services, LLC, et al., No. 2:21-cv-02157 (E.D., PA June 29, 2023), plaintiffs agreed to settle a lawsuit in dispute over the company’s ESOP valuation.
Employee Ownership Legal Digest (10) Archive
Stay informed on the latest legal developments impacting employee ownership. This page provides timely and concise summaries of key cases and rulings, contributed by experienced attorneys, to help the entire employee ownership community understand their implications, and also offers access to NCEO's archive of prior content.
Corey Rosen
Arbitration Clause Does Not Override Litigants’ ERISA Rights in RNVB Case
In Su v. Petersen et al., No. 4:19-cv-00705 (E.D. Tex. July 12, 2023), a district court also allowed a case to proceed despite an arbitration clause. Plaintiffs allege that a trustee allowed a sale of the assets of the ESOP trust back to the company (RNVB) at a price that was below what the stock was worth.
Corey Rosen
Labor Department Wins Court Order Removing Trustee in Case Involving Misappropriations of Assets
In Su v. Ascent Construction Inc., No. 2:23-cv-250 (D.C. Utah July 3, 2023) the US Labor Department won a court order removing the trustee of a Utah construction company’s employee stock ownership plan.
Corey Rosen
Arbitration Clauses Not Enforceable in ESOP Cases
In Henry v. Wilmington Trust et al., No. C.A. 19-1925 DM (D.C. Del. June 30, 2023), a district court ruled that a plaintiff (Henry) was not subject to an arbitration clause in the company’s ESOP. Henry contends the ESOP had overpaid for the shares at BSC Ventures.
Corey Rosen
Guidance Issued on Expansion of Employee Plans Compliance Resolution System
SECURE 2.0 expanded the application of the Employee Plans Compliance Resolution System (EPCRS), which allows companies to voluntarily correct certain errors.
Corey Rosen
Trustee, Not Participants, Has the Right to File Claims in ESOP Bankruptcy Case
In CPESAZ v. Oxford Restructuring Advisers, Bk. No. 9:20-bk-10554-DS (9th Cir. Bankruptcy Appellate Panel, June 2, 2023), the 9th Circuit ruled that ESOP participants in an ESOP at Community Provider of Enrichment Services Arizona do not have grounds for filing claims against the company in a bankruptcy liquidation case.
Corey Rosen
Triad Manufacturing ESOP Case Settled
In Smith v. Greatbanc Trust, No. 20 C 2350 (D. Ill. June 7, 2023), a district court approved a $14.8 million settlement involving an ESOP at Triad Manufacturing. The ESOP had purchased the company for $106 million in 2015.
Corey Rosen
KPC Healthcare Case Comes to an End
In Gamino v. KPC Healthcare Holdings, Inc. et al., No. 5:20-V-01126-SB-SHK (C.D. Cal. June 5, 2023), Silver Point Capital agreed to a $100,000 settlement over its role in the ESOP at KPC Healthcare. Silver Point had previously won a dismissal from the case.
Corey Rosen
DOL ESOP Valuation Regulation Process Outlined
The US Department of Labor (DOL) has stated that it will undertake a formal notice and comment rulemaking “relatively soon” on the adequate consideration requirement governing the valuation of ESOP-held shares.
Corey Rosen
Triad ESOP Settlement Terms Announced
In Smith v. GreatBanc Trust Company, No. 20 C 2350 (N.D. Ill. Feb. 9, 2023), plaintiffs and defendants agreed to settle a case in which the plaintiffs argued that their ESOP paid $104 million for stock they contend was worth only $4 million.