May 1, 2020

Wilmington Trust and DOL Reach $88M Settlement

In a press release issued on April 30, the Department of Labor (DOL) announced that it had reached an agreement with Wilmington Trust "to pay a combined $80 million to 21 employee stock ownership plans (ESOPs) for which it served as trustee and $8 million to the government, and to reimburse plan sponsors of ESOPs for legal costs and expenses advanced in connection with the Secretary’s investigations and litigation."

The settlement resolves three cases involving ESOPs at Graphite Sales Inc., HCMC Legal Inc., and Stargate Apparel Inc., and investigations of 18 other ESOPs. The DOL's Employee Benefits Security Administration (EBSA) argued that the ESOP trusts had overpaid for shares, but in the settlement Wilmington Trust neither admits nor denies the EBSA's allegations.