Corey Rosen
Exxon Again Prevails in Stock Drop Suit
In Fentress v. Exxon Mobil, No. 4:16-cv-03484 (S.D. Tex, Feb. 4, 2019) a district court again rejected employee claims over the decline in Exxon Mobil stock price in their 401(k) plan.
Employee Ownership Legal Digest (25) 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
Sellers and Company Can Be Held as Fiduciaries for Oversight of Trustee
In Acosta v. Saakvitne, No. 18-2019 BL18093 (D. Haw., Jan. 18, 2019), a district court denied motions to dismiss both the company, Bowers + Kubota Consulting, and the sellers to the company’s ESOP, for their alleged roles as fiduciaries.
Corey Rosen
Wawa Provides Limited Agreement on Class Status of Plaintiffs
In Cunningham v. Wawa, No. 2:18-cv-03355 (E.D. Pa., Feb. 18, 2019), Wawa partially agreed to allow plaintiffs to proceed with their action as a class, but reserved the right to challenge whether named plaintiffs are representative and whether affirmative defenses apply to any individuals.
Corey Rosen
DOL Amicus Brief in Lifetouch Case Argues for Stricter Standards for ESOP Fiduciaries
In Vigeant v. Meek, No. 18-3616 (Eighth Cir., Feb. 26, 2019), the DOL entered an amicus brief on the side of plaintiffs appealing a previous district court ruling saying that plaintiffs in the Lifetouch ESOP case did not adequately plead that the plan’s fiduciaries had violated their ERISA duties with respect to an alleged overvaluation and continued purchase of Lifetouch shares.
Corey Rosen
IBM Case Put on Hold
Jander v. Retirement Plans Committee of IBM, No. 17-3518, (2nd Cir., Feb. 4, 2019): The Second Circuit refused a request by IBM to put a case on hold in which the Court had previously ruled that plaintiffs in a stock drop suit could rely on a more favorable interpretation of the Dudenhoeffer standard.
Corey Rosen
Qualifying Equity Grants Under Empowering Employee Ownership Act
The 2017 tax bill contained provisions that allowed employees in private companies that provide non-qualified stock options and restricted stock units to at least 80% of their workforce to defer taxation on the awards until up to five years after termination.
Corey Rosen
Judge Inclined to Consider Owners of Company Sold to ESOP as Fiduciaries
In Acosta v. Saakvitne, No. 1:18-cv-00155-SOM-RLP, (D. Haw. inclinations Jan. 13, 2019) a district judge told counsels that she was inclined to rule that two owners of a Hawaii construction company that sold to an ESOP could be considered fiduciaries of the plan because they hired and were responsible for monitoring the appraisal firm and failed to provide realistic financial projections.
Corey Rosen
Wawa Suit Can Move Forward
In Cunningham v. Wawa, Inc., No. 2:18-cv-03355-PD (E.D. Pa., Ja. 10, 2019), a judge allowed a lawsuit against Wawa over changes in its ESOP to move forward.
Corey Rosen
Reliance Cannot Bring Estate Into ESOP Litigation
In Acosta v. Reliance Trust, No. 0:17-cv-04540- SRN-ECW (D-Mon. Ja. 7, 2019), a district court ruled that Reliance Trust could not bring the estate of a now deceased owner into a lawsuit the DOL has filed against Reliance in a case involving an alleged overvaluation of shares for sale to the ESOP.
Corey Rosen
IBM Employees Get Rehearing of Stock Drop Case
Jander v. Retirement Plans Committee of IBM, No. 17-3518, (6th Cir., Dec. 10, 2018) is a potentially important ruling that runs against recent trends in stock drop cases. The Second Circuit reversed and remanded a lower court ruling that found that the trustees of IBM’s ESOP were not in violation of their fiduciary duty when they failed to disclose that a major division of the company was overvalued.