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 Su v. Bowers, D.C. No. 1:18-cv-00155SOMWRP (9th Cir. Jan. 7, 2024), the Ninth Circuit again said that the Department of Labor did not have to pay attorneys’ fees to the defendant attorneys in a valuation case the DOL decisively lost.
Corey Rosen
In Bolton v. Inland Fresh Seafood Employee Stock Ownership Plan, No. 1:22-cv-04602-AT (N.D. Ga. Dec. 5, 2023) a district court dismissed a lawsuit at Inland Fresh Seafood over the valuation of the company when it was sold to the ESOP in 2016 for $92 million.
Corey Rosen
In Kloss v. Argent Trust Co., No. 23-cv-0301 (D. Minn. Dec. 12, 2023), a federal court allowed a case over the purchase of shares in TPI by an ESOP to continue.
Corey Rosen
In Moore v. Va. Cmty. Bankshares, No. 3:19-cv00045 (W.D. Va. Nov. 28, 2023), a settlement has been reached in a lawsuit alleging fiduciary improprieties in the sale of ESOP shares at Virginia Community Bank (VCB) prior to a merger.
Corey Rosen
In Rev. Rul. 2003-27; 2003-1 C.B. 597, EB. 20, 2003, the IRS ruled that the basis of shares on an S corporation ESOP trust must be adjusted in the same way as any other S corporation shares are adjusted for the purpose of calculating net unrealized appreciation.
Corey Rosen
In Su v. Bowers, D.C. No. 1:18-cv-00155SOM-WRP (9th Cir. Oct. 23, 2023), the Ninth Circuit said that the Department of Labor did not have to pay attorneys’ fees to the defendants’ attorneys in a valuation case the DOL decisively lost.
Corey Rosen
Courts have generally not favored arbitration clauses in ESOPs. As we reported in November 2023, the Supreme Court recently declined to hear two appeals of cases in which an arbitration clause was denied as a defense.
Corey Rosen
On October 10, the Supreme Court, without comment, denied an effort to hear an appeal of a 10th Circuit decision to deny arbitration in an ESOP case. In Harrison v. Envision Management Holding Company, No. 22-1098 (10th Cir. Apr. 11, 2023), the 10th Circuit denied a request that it reconsider its earlier three-judge ruling that Envision Management Holding Company cannot compel arbitration in a case concerning the price an ESOP paid for shares in the company.
Corey Rosen
On October 16, the Supreme Court denied a request to allow arbitration in another ESOP case. 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.
Corey Rosen
In Smith v. Greatbanc Trust, No. 20 C 2350 (D. Ill. Aug. 22, 2023), a district court gave final approval to a $14.8 million settlement involving an ESOP at Triad Manufacturing.
