Employee Ownership Legal Digest Archive

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.

Christopher Wingard

Court Permits Most Claims in Hollandia ESOP Suit to Proceed

Sawlaw v. Mosaic Capital Investors I, LP, et al., No. 3:25-cv-624 (W.D.N.C, Mar. 3, 2026)

At the motion to dismiss stage, a North Carolina federal district court permitted most ERISA fiduciary-breach claims, brought by former Hollandia Produce Group, Inc.’s employees on behalf of the company’s ESOP, to proceed against GreatBanc Trust Company (the ESOP trustee); Mosaic Capital Investors I, LP; True West Capital Partners Fund II, L.P.; certain other defendants; and attorney Michael Zeller.

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Allison Wilkerson

ESOP Class Action Settlement in ACCT Holdings, Inc. Litigation Clears First Hurdle

LeDuc et al. v. Paredes et al., No. 2:24‑cv‑05970 (E.D. Pa. Feb. 3, 2026)

On February 3, 2026, a court granted preliminary approval of the parties’ proposed class settlement in LeDuc et al. v. Paredes et al., allowing an $8.75 million ACCT ESOP settlement to proceed to notice and final approval.

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David Joffe

Selling Shareholder Trusts Subject to ESOP Arbitration Award

Robertson v. Argent Trust Company et al., No. 2:21-cv-01711-DWL (D. Ariz. Feb. 20, 2026)

The plaintiffs in this case filed a lawsuit in 2021 alleging that the trustee of the company’s ESOP and certain individuals breached their fiduciary duties by overpaying for the company's stock. The trustee asserted that the plaintiff’s claims were subject to arbitration.

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Christopher Wingard

Court Permits Cash Management ESOP Suit to Proceed Against Aluminum Precision Products ESOP Committee

Gustavo Moran v. ESOP Committee of the Aluminum Precision Products, Inc. Employee Stock Ownership Plan, No. 8:24-cv-00642 (C.D. Cal., January 28, 2026)

A federal district court in the Central District of California has allowed several ERISA claims to move forward in a class action suit brought by ESOP participant Gustavo Moran against the ESOP Committee of the Aluminum Precision Products, Inc. Employee Stock Ownership Plan.

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Tabitha Croscut

Court Rejects ESOP Claims Against Auditor in Appvion Bankruptcy Fallout

Appvion, Inc. Retirement Savings and Employee Stock Ownership Plan v. PriceWaterhouseCoopers LLC, No. 2023AP1709 (Wis. Ct. App. Jan. 27, 2026)

The Appvion, Inc. Retirement Savings and Employee Stock Ownership Plan (ESOP) owned 100% of Paperweight Development Corporation's stock. In 2017, Paperweight Development Corporation (PDC) and its subsidiary Appvion, Inc. filed for bankruptcy, leaving the PDC stock worthless.

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Wendy Gilligan

California OTA Affirms Tax Penalties on S-Corp ESOP as “Abusive Tax Avoidant Arrangement”

Appeal of A. Varela and J. Varela, 2026-OTA-036NP

On November 4, 2025, the California Office of Tax Appeals (“OTA”) issued a nonprecedential decision in a dispute between appellants A. Varela and J. Varela and respondent Franchise Tax Board (“FTB”), regarding the tax treatment of Mud Management, Inc. (“Mud”).

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Christopher Wingard

Court Orders Plaintiffs to Submit Specific Factual Allegations in Rule 7 Reply in ESOP Lawsuit Against Alerus Financial

Dalton et al. v. Freeman et al., No. 2:22-cv-00847-DJC-DMC (E.D. Cal. Dec. 30, 2025)

The U.S. District Court for the Eastern District of California has ordered the plaintiffs in Dalton et al. v. Freeman et al. to submit specific factual allegations in a Rule 7 reply.

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Christopher Wingard

11th Circuit Affirms District Court Ruling that ESOP Arbitration Clause Is Invalid

Williams v. Shapiro, No. 24-11192 (11th Cir. Dec. 15, 2025)

The United States Court of Appeals for the Eleventh Circuit affirmed a district court ruling that invalidated an arbitration provision in an employee stock ownership plan sponsored by A360, Inc. (the “ESOP”), holding that the clause unlawfully waived participants’ statutory rights under ERISA. This ruling affirms the earlier procedural decision that allowed the claims to proceed. For the full history of the initial district court case and the underlying arbitration dispute, see the original NCEO Legal Digest entry: Court Rules Arbitration Clause Does Not Apply in A360 ESOP Termination Lawsuit.

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Christopher Wingard

80/20 ESOP Fiduciary Dispute Reaches Settlement in Principle

Walther et al. v. Wood et al., No. 1:23‑cv‑00294‑GSL‑ALT (N.D. Ind. Mar. 9, 2026)

On December 19, 2025, the parties to a multi-year dispute regarding 80/20 Inc.’s Employee Stock Ownership Plan (ESOP) filed a joint notice of settlement in federal court. For a history of the underlying “rightful buyer” claim, see the original NCEO Legal Digest Post: Claim that ESOP is rightful buyer of company dismissed, but other claims allowed to continue.

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