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
In Nguyen v. Westlake Services Holding Company, No. 8:23-cv-00854 (C.D. Cal. Feb. 5, 2024), the plaintiff alleged that Westlake Holding Company changed its ESOP rules in 2020 to allow the company to segregate accounts of former employees before their receiving a distribution as well as to allow a special interim valuation to reflect economic challenges arising from the pandemic.
Corey Rosen
In the long-running case of Appvion Retirement Savings Retirement and Employee Stock Ownership Plan v. Buth, No. 18-CV-1861-WCG (7th Cir. Apr. 24, 2024), the 7th Circuit overruled part of a lower court’s dismissal of the ESOP valuation lawsuit. The case involves an ESOP at Appleton Paper (later Appvion). In 1998, employees funded the $106 million transaction by investing funds from their 401(k) plan.
Corey Rosen
There have been multiple lawsuits involving the ESOP at KPC Healthcare over the initial valuation and later the sale of the company. Three have been settled, but in Truong v. KPC Healthcare ESOP Committee, Case No. 8:23-cv-01384-SB-BFM (C.D. Cal. May 3, 2024), a court let a case proceed.
Corey Rosen
In Hensiek v. Bd. of Dirs. of Casino Queen Holding Co., 20-cv-377-DWD (S.D. Ill. Mar. 6, 2024), the 7th Circuit approved a request by workers to appeal a prior judgment denying them class status.
Corey Rosen
In Great American Fidelity Insurance Company v. Stout Risius Ross, Inc., Nos. 23-1167/1195 (6th Cir., Apr. 8, 2024), the 6th Circuit ruled that Great American was not responsible for all of the cost of the legal defense for Stout Risius, an ESOP valuation firm, in an ESOP lawsuit.
Corey Rosen
In Placht v. Argent et. al., No. 1:21-cv5783 D (N.D. Ill. Mar. 24, 2024), a district court came to a mixed ruling in an ESOP valuation case against the trustee for an ESOP at Symbria, Argent Trust.
Corey Rosen
In a second radiology company case, Colon v. Johnson, No. 8:22-cv-00888-TPB-TGW (Mar. 28, 2024), a $19 million settlement was reached concerning alleged diversion of assets in an ESOP company.
Corey Rosen
In Williams v. Shapiro, No. 1:23-cv-03236-VMC (Mar. 20, 2024), plaintiffs allege that an ESOP set up at their company, A360, was improperly terminated, preventing them from reaping potentially very large gains on their unallocated stock.
Corey Rosen
In Harrison v. Envision Management Holding Company, No. 22-1098 (D. Colo. Mar. 21, 2024), a district court said that plaintiffs had pleaded sufficient allegations to allow a case concerning the price paid by an ESOP for Envision Radiology to continue.
Corey Rosen
In USA v. Corl et al., Docket No. 5:18-cr-00576 (N.D. Cal. Mar. 19, 2024), Harry Corl, former owner and CEO of Nu-Metal Finishing, was sentenced to serve 30 months in prison and pay $253,625 in restitution to 30 former employees of a company he and his wife had partially owned. The Corls sold part of the company to the ESOP, while the other part was owned by a separate owner.
