Corey Rosen
Settlement Terms in IBM Case Revealed
Settlement terms in the long-running stock-drop case Retirement Plans Committee of IBM v. Jander et al., No. 18-165 (U.S., Jan. 14, 2020) have been revealed.
Employee Ownership Legal Digest (19) 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
Court Allows Insurer to Proceed with Claims It Does Not Have to Defend or Indemnify ESOP Appraisal Firm
In Great American Fidelity Insurance Company v. Stout Risius Ross, Inc. et al, No. 2:19-cv-11294 (E.D. Mi, March 4, 2021), a district court allowed Great American Insurance Company to proceed with claims it does not have to defend or indemnify the ESOP appraisal firm Stout Risius Ross over allegations about its valuation work for Appvion, an ESOP company that went bankrupt.
Corey Rosen
Starkey ESOP Case Settled
In Beck v. Austin, No. 19-CV-1453 (D.C., Minn., March 12, 2021), a court approved a $173,000 settlement against various defendants, including the CEO, of Starkey Laboratories, a hearing aid manufacturer.
Corey Rosen
Mixed Decision in ESOP Valuation Case
In Stewart v. Saakvitne, No. 18-00155 SOM-WRP, (D. Haw., March 12, 2021), a district court denied summary judgment to former members of the board of directors of an ESOP firm, Bowers + Kubota, over an ESOP valuation case.
Corey Rosen
Class Status Approved in ESOP Refinancing Case
In Gamache v. Hogue, No. 1:19-CV-21, (M.D. Ga. March 3, 2021), a court certified class to allowed plaintiffs to proceed with a lawsuit alleging that a refinancing of a 97% ESOP that resulted in the two principals of the firm ending up with 40% of the shares was a violation.
Corey Rosen
Former ESOP Company Executive Sentenced to Prison for Financial Fraud
In United States v. Lindsey 3:20-cr-00022 (E.D. Va. Feb 18, 2020), a district court convicted Patrick Lindsey, a former vice president of MGT Construction, of financial fraud involving over $20 million and sentenced him to 27 months in prison.
Corey Rosen
ESOP Valuation Case Can Proceed
In Scalia v. Reliance Trust et.al., No. 17-cv-4540 SRN-ECW (D.C., Minn., March 2, 2021), a district court rejected motions to provide a partial summary judgment for the plaintiffs or to dismiss the case for defendants.
Corey Rosen
Plaintiffs Lose Again in Johnson & Johnson Case
In Perrone v. Johnson & Johnson, No. 3:19-cv-00923, (D. N.J., Feb. 26, 2021), a district court rejected a lawsuit alleging that Johnson & Johnson executives breached their fiduciary duties when they did not reveal problems with its talcum powder that were linked to cancer cases.
Corey Rosen
IRS Seeks Comments on Form 5309 ESOP Determination Letter Request
As part of a program to reduce federal paperwork requirements, the IRS is asking for comments on Form 5309, Application for Determination of Employee Stock Ownership Plan. Comments are dues by April 21. Direct all written comments to Kinna Brewington, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224.
Corey Rosen
GreatBanc Case Can Proceed
In Godfrey v. GreatBanc et. al., No. 18 C 7918 (N.D. Ill., Feb. 21, 2021), a district court certified a class action lawsuit in an ESOP case at McBride and Sons involving a 2013 reorganization that reduced the ESOP’s ownership from 100% to 60%, with officers of the company owning 40%.