Corey Rosen
IRS Extends Deadlines for Certain Plan Amendments
In IRS Notice 2022-45, the IRS extended plan amendment deadlines for compliance with two recent laws. These include...
Employee Ownership Legal Digest (15) 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
World Travel Lawsuit Settled
In Ahrendsen, et al. v. Prudent Fiduciary Services, LLC, et al., No. 2:21-cv-02157 (E.D., PA, Nov. 7, 2022), the plaintiffs agreed to settle a lawsuit in dispute over the company’s ESOP valuation.
Corey Rosen
Stout Risius Must Pay Fiduciary Insurer
In Great American Fidelity Insurance Company v. Stout Risius Ross, Inc. et al., No. 2:19-cv-11294 (E.D. Mi, Nov. 1, 2022), a district court ruled the ESOP valuation firm Stout Risius must pay $60,000 in costs the company argued should have been covered by its insurer, Great American Fidelity Insurance Company.
Corey Rosen
ESOP Restoration: $540,000 Ordered from Trustee Seller
In Walsh v. Robert N. Preston, TPP Holdings, No. 1:14-cv-04122-ELR (N.D. Ga., Sept. 20, 2022), a court ordered TPP Holdings and former owner Robert Preston to restore $540,000 to the ESOP over an alleged overvaluation of shares the plan bought in 2006 and 2008, as well as other violations.
Corey Rosen
Alerus agrees to $4 million settlement in KPC case
In Gamino v. KPC Healthcare Holdings, Inc. et al., No. 5:20-V-01126-SB-SHK (C.D. Cal. Oct. 10, 2022), Alerus agreed to a $4 million settlement with KPC Healthcare in an ERISA valuation case.
Corey Rosen
ISCO plaintiffs must arbitrate their claims
In Best et al v. James., No. 320-cv-299-JRW (W.D. Ky., Sept. 22, 2022) a court ruled that plaintiffs must agree to arbitrate their claims against executives of ISCO Industries concerning the buyback of company shares from the ESOP. In a prior 2019 decision, Swain v. Wilmington Trust N.A., a federal judge approved a $5 million settlement with a class of employees at ISCO Industries who alleged the ESOP had overpaid for the shares.
Corey Rosen
Aetna, CVS win 401k stock drop claim after merger
In Radcliffe v. Aetna, Inc., 3:20-cv-01274-VAB (D. Conn. Sep. 30, 2022), CVS and Aetna defeated a claim that the defendants acted imprudently in not disclosing information about the financial risks facing CVS that emerged after the merger. CVS acquired Aetna in 2018.
Corey Rosen
State court upholds sale to ESOP
In Eichhoff et. al. v. New Glarus Brewing (WI, No. 2021CV002011 (Cir. Ct., Dane County, Oct. 6, 2022), a Wisconsin court dismissed a lawsuit against ESOP-owned New Glarus Brewing over the price three of its early investors got when they sold their stock after the ESOP was formed.
Corey Rosen
Johnson & Johnson Prevails in Stock Drop Suit
In Perrone v. Johnson & Johnson, No. 21-1885 (3d Cir. Sept. 7, 2022) the Third Circuit ruled that the trustees of Johnson & Johnson’s 401(k) plan could reasonably argue that to remove Johnson & Johnson stock from the plan’s investment options in light of litigation over asbestos in its talcum powder could arguably have “done more harm than good” and thus were not obligated to make changes under the doctrine of the Dudenhoeffer decision.
Corey Rosen
Settlement Reached in Maine Oxy Case:
In Walsh v. Maine Oxy Acetylene Supply, No. 2:20- incv-00326-NT (D. Me. Aug. 26, 2022), parties reached a $6.5 million settlement in a case in which plaintiffs contended that the ESOP trustee and the CEO of the company terminated an ESOP at an improperly low price to orchestrate a favorable deal for members of the board to buy back the 49% of the company the ESOP then owned.