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
The 2017 tax bill contained provisions that allowed employees in private companies that provide non-qualified stock options and restricted stock units to at least 80% of their workforce to defer taxation on the awards until up to five years after termination.
Corey Rosen
In Acosta v. Saakvitne, No. 1:18-cv-00155-SOM-RLP, (D. Haw. inclinations Jan. 13, 2019) a district judge told counsels that she was inclined to rule that two owners of a Hawaii construction company that sold to an ESOP could be considered fiduciaries of the plan because they hired and were responsible for monitoring the appraisal firm and failed to provide realistic financial projections.
Corey Rosen
In Cunningham v. Wawa, Inc., No. 2:18-cv-03355-PD (E.D. Pa., Ja. 10, 2019), a judge allowed a lawsuit against Wawa over changes in its ESOP to move forward.
Corey Rosen
In Acosta v. Reliance Trust, No. 0:17-cv-04540- SRN-ECW (D-Mon. Ja. 7, 2019), a district court ruled that Reliance Trust could not bring the estate of a now deceased owner into a lawsuit the DOL has filed against Reliance in a case involving an alleged overvaluation of shares for sale to the ESOP.
Corey Rosen
Jander v. Retirement Plans Committee of IBM, No. 17-3518, (6th Cir., Dec. 10, 2018) is a potentially important ruling that runs against recent trends in stock drop cases. The Second Circuit reversed and remanded a lower court ruling that found that the trustees of IBM’s ESOP were not in violation of their fiduciary duty when they failed to disclose that a major division of the company was overvalued.
Corey Rosen
In Sulyma v. Intel Investment Policy Committee, No. 17-5864 (9th Cir., Nov. 28, 2018) the Ninth Circuit ruled on a statute of limitation claim involving Intel’s 401(k) plan. While employer stock was not involved, the decision is important for ESOP cases.
Corey Rosen
The IRS has issue new limits for retirement plans for 2018
Corey Rosen
Due to budget constraints, the IRS stopped issuing determination letters for periodic compliance. Under prior procedures, companies filed for letters of determination in a five-year cycle. The process allowed companies to receive IRS validation of plan changes.
Corey Rosen
In Spires v. Schools, No. 2:16-cv-00616- RMG, (D.C. S.C., preliminary settlement approved), a district court approved a $5.2 million settlement of $5.2 million in cash plus an additional deposit into the settlement fund account of between $2.475 million and $3.45 million.
Corey Rosen
In Wengert v. Rajendran, No. 16-4571 (8th Cir. Apr. 3, 2018), a circuit court upheld a lower court ruling on how much discretion can be given to plan administrators concerning the timing of distributions. The case revolved around unusual facts.
