Corey Rosen
ESOP Participants at TPI Hospitality Can Continue Lawsuit
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.
Employee Ownership Legal Digest (11) Archive
Stay informed on the latest legal developments impacting employee ownership with timely and concise summaries of key cases and rulings. Learn more about this digest »
Corey Rosen
ESOP Lawsuit Over Sale of ESOP Company Reaches Settlement
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
IRS Rules That ESOP Shares Should Have Basis Adjusted for Net Unrealized Appreciation Calculations
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
9th Circuit Says DOL Not Responsible for Fees in Failed ESOP Lawsuit
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
District Court Upholds Arbitration Clause in ESOP Dispute
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
Supreme Court Denies ESOP Arbitration Appeal in Harrison Case
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
Supreme Court Declines ESOP Arbitration Case Review
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
Triad Manufacturing ESOP Case Settlement Approved
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.
Corey Rosen
Settlement Reached in RVR ESOP Case
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
Selling Shareholders Dismissed from Morton Buildings ESOP Case
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.