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
In O’Day v. Chatila, No. 18-2621 (2nd Cir., June 7, 2019, unpublished), the Second Circuit affirmed a lowa court ruling stating that employees had not alleged a sufficient claim to overcome the Dudenhoeffer rule that plaintiffs must show that defendants had a plausible alternative course of action with regard to company stock investments in a retirement plan that would not have done more harm than good.
Corey Rosen
In Retirement Plans Committee of IBM v. Jander, No. 18-1165 U.S. (certiorari granted June 3, 2019), the U.S. Supreme Court agreed to review a Second Circuit decision that could have a significant impact on how the Dudenhoeffer standard is interpreted.
Corey Rosen
In Bloostein et al. v. Morrison Cohen LLP et al. No. 651241/2102, (Supreme Court of NY, Feb. 19, 2019), the law firm Morrison Cohen was denied a motion to dismiss a case against it arguing that advice it provided to sellers to multiple ESOPs caused them to lose their tax deferral in a Section 1042(a) transaction.
Corey Rosen
In Foster v. Adams & Assocs., Inc., No. 3:18-cv-02723-JSC, N.D. Cal., Feb. 26, 2019), a district court ruled that employees can proceed with a lawsuit alleging the ESOP at Adams & Associates overpaid for the shares and that the trustee for the plan, a former felon, should not have been appointed.
Corey Rosen
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.
Corey Rosen
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
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
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
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
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.
