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 Walsh v. Reliance Trust Co., et al., No. CV-19-03178-PHX-JJT (D.C. Ariz. Aug. 30, 2023), a district court approved a $22.5 million consent decree in the case of RVR, Inc. The case originated in a 2019 lawsuit alleging that Reliance Trust allowed an ESOP to overpay for the shares of RVR, Inc.
Corey Rosen
In Lysengen v. Argent Trust, et al., No. 1:20-cv-01177MMM-JEH (D.C. Ill. Sept. 7, 2023), former shareholders of Morton Buildings were dismissed as defendants in a case concerning the valuation of their shares in a sale to the company’s ESOP.
Corey Rosen
In Lysengen v. Argent Trust, et al., No. 1:20-cv-01177-MMM-JEH (D.C. Ill. Aug. 10, 2023) an individual plaintiff was allowed to sue on behalf of the ESOP trust. The case involved the alleged overvaluation of stock at Morton Buildings.
Corey Rosen
In David Burnett, et al., v. Prudent Fiduciary Services LLC, et al., No. 22-270-RGA (3rd Cir. August 15, 2023), the 3rd Circuit affirmed a lower court ruling that an arbitration clause does not apply in an ESOP case.
Corey Rosen
In our previous discussion of the settlement in the KPC Healthcare ESOP, we noted that the plaintiffs pointed to a sharp drop in the company’s stock price after the ESOP.
Corey Rosen
In Darnis v. Raytheon Techs. Corp., 22-2861-cv (2nd Cir. Aug. 3, 2023), the 2nd Circuit denied an effort by employees who had received equity compensation awards when United Technologies was sold to Raytheon in 2020.
Corey Rosen
The proposed regulations would “clarify that forfeitures arising in any defined contribution plan (including in a money purchase pension plan) may be used for one or more of the following purposes, as specified in the plan: (1) to pay plan administrative expenses, (2) to reduce employer contributions under the plan, or (3) to increase benefits in other participants’ accounts in accordance with plan terms.”
Corey Rosen
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.
Corey Rosen
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
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.
