Corey Rosen
KPC Settlement
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.
Employee Ownership Legal Digest (13) 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
Raytheon Defeats Bid to Reopen United Technologies Stock Plan Lawsuit
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
IRS proposed changes to forfeiture rules
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
World Travel ESOP Settlement Approved
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
Arbitration Clause Does Not Override Litigants’ ERISA Rights in RNVB Case
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
Labor Department Wins Court Order Removing Trustee in Case Involving Misappropriations of Assets
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.
Corey Rosen
Arbitration Clauses Not Enforceable in ESOP Cases
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. Henry contends the ESOP had overpaid for the shares at BSC Ventures.
Corey Rosen
Guidance Issued on Expansion of Employee Plans Compliance Resolution System
SECURE 2.0 expanded the application of the Employee Plans Compliance Resolution System (EPCRS), which allows companies to voluntarily correct certain errors.
Corey Rosen
ESOP Participants Denied Claims in Bankruptcy Case
In CPESAZ v. Oxford Restructuring Advisers, Bk. No. 9:20-bk-10554-DS (9th Cir. Bankruptcy Appellate Panel, June 2, 2023), the 9th Circuit ruled that ESOP participants in an ESOP at Community Provider of Enrichment Services Arizona do not have grounds for filing claims against the company in a bankruptcy liquidation case.
Corey Rosen
Triad Manufacturing ESOP Case Settled
In Smith v. Greatbanc Trust, No. 20 C 2350 (D. Ill. June 7, 2023), a district court approved a $14.8 million settlement involving an ESOP at Triad Manufacturing. The ESOP had purchased the company for $106 million in 2015.