Corey Rosen
KPC ESOP Class Action Can Proceed Against Investment Manager
Gamino v. KPC Healthcare lets ESOP employees proceed with an overvaluation lawsuit, allowing class claims and challenging trustee and advisor conduct.
Employee Ownership Legal Digest (18) 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
McBride ESOP Case Settled
In Godfrey v. GreatBanc et al., No. 18 C 7918 (N.D. Ill. May 16, 2022), a court approved an agreement to settle a lawsuit over an ESOP reorganization at McBride & Company in a 2013 reorganization that reduced the ESOP’s ownership from 100% to 60%, with officers of the company owning 40%.
Corey Rosen
Settlement Approved in Raydon Case
In Woznicki v. Raydon Corp., No. 6:18-cv-02090-WWB-GJK (M.D. Fla., May 2, 2022), a district court awarded a $2.4 million settlement in a case challenging a $60.5 million transaction in which Raydon became owned by an ESOP.
Corey Rosen
ESOP Lawsuit Over Sale of ESOP Company Can Proceed
In Moore v. Va. Cmty. Bankshares, No. 3:19-cv-00045 (W.D. Va.. Mar. 30, 2022), a court ruled that a lawsuit alleging fiduciary improprieties in the sale of ESOP shares at Virginia Community Bank (VCB) prior to a merger could continue.
Corey Rosen
Court Dismisses Valuation Firm’s Claim Against Insurer
In Stout Risisus Ross v. Aspen Insurance, No. 21 Civ. 4412 (ER) (S.D. N.Y., March 18, 2022), a district court ruled that Aspen Insurance did not have a duty to indemnify and defend Stout Risius Ross (SRR) for actions arising out of its valuation work for Wilmington Trust, which acted as the trustee for an ESOP at Constellis, Inc.
Corey Rosen
Court Allows Valuation Case to Proceed
In Lysengen v. Argent Trust, et. al., No. 1:20-cv-01177-MMM-JEH (D.C. Ill., March 22, 2022) a court ruled that an ESOP valuation could proceed against additional defendants in a case where the court had previously allowed the case to proceed against the plan’s trustee.
Corey Rosen
Mixed Ruling in Appvion ESOP Case
In the long-running case of Appvion Retirement Savings Retirement and Employee Stock Ownership Plan v. Buth, Case No. 18-CV-1861-WCG (E.D. Wis., Mar. 17, 2022) a magistrate recommended to the court that it dismiss most of the claims in a revised complaint, but allow two to stand. The case involves an ESOP at Appleton Paper (later Appvion). Employees funded the $106 million transaction by investing funds from their 401(k) plan.
Corey Rosen
IRS Private Letter Ruling on Tax Status of ESOP Held Shares in a Spinoff
In PLR 202210004 (March 11, 2022) the IRS issued a private letter ruling concerning a complex business reorganization of a public company that offered an ESOP. The company spun off some of its assets to a new company it controlled and spun out another company as a separate entity.
Corey Rosen
Court Dismisses Some Claims in ESOP Valuation Case
In Novosel v. Azcon Inc. Employee Benefits Plan Committee, No. 21 C 3080, (N.D. Il, E.D., March 8, 2022), a district court dismissed two claims concerning the valuation of stock for their plaintiff in Azcon’s ESOP, but allowed her to continue a breach of contract claim alleging that Azcon miscalculated her share value and distributed $50,000 less than she was owed.
Corey Rosen
IRS Issues Proposed Regulations for Required Minimum Distributions Under SECURE Act
On February 24, the IRS issued proposed regulations for retirement distributions under the SECURE Act. The 273-page proposal deals with a wide variety of issues, such as how RMDs are distributed to heirs after a participant’s death, how annuities are treated, and other issues.