Corey Rosen
IRS Issues New Plan Limits for 2018
The IRS has issue new limits for retirement plans for 2018
Employee Ownership Legal Digest (26) 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
IRS Determination Later May Be Partially Renewed
Due to budget constraints, the IRS stopped issuing determination letters for periodic compliance. Under prior procedures, companies filed for letters of determination in a five-year cycle. The process allowed companies to receive IRS validation of plan changes.
Corey Rosen
Piggly Wiggly Employees Reach Settlement in Major ESOP Case
In Spires v. Schools, No. 2:16-cv-00616- RMG, (D.C. S.C., preliminary settlement approved), a district court approved a $5.2 million settlement of $5.2 million in cash plus an additional deposit into the settlement fund account of between $2.475 million and $3.45 million.
Corey Rosen
Distribution Deemed to Have Occurred When Made, Not Received
In Wengert v. Rajendran, No. 16-4571 (8th Cir. Apr. 3, 2018), a circuit court upheld a lower court ruling on how much discretion can be given to plan administrators concerning the timing of distributions. The case revolved around unusual facts.
Corey Rosen
Settlement Filed in Case of Executives Buying Company Back from an ESOP
In Gough v. Tennyson, (N.D. Cal., No. 4:17-cv-02215-PJH, March 2, 2018, motion for preliminary settlement approval), a court approved a $1.75 million settlement in a case in which executives bought a company from an ESOP at an allegedly considerable discount to fair market value.
Corey Rosen
Settlement in ESOP Case Involving Self-Serving Executive Decisions
In Brent v. Meeker, No. 8:17-cv-02433- EAK-AEP, (M.D. Fla., March 29, 2018, motion for settlement approval), parties agreed to a $170,000 settlement in the case of Meeker Enterprises.
Corey Rosen
Sonnax Case Settled
In Acosta v. First Bankers Tr. Servs., Inc., (No. 5:16-cv-00328-gwc) (D.-Vt, proposed consent judgment, April 27, 2018) the DOL and First Bankers Trust settled a lawsuit alleging that the ESOP at Sonnax Industries overpaid for its shares.
Corey Rosen
401(k) Employer Stock Challenge Loses
Continuing the string of losses in challenges to employer stock in 401(k) plans, in Fentress v. Exxon Mobil Corp., No. 4:16-cv-03484, (S.D. Tex., March 30, 2018, order granting defendants’ motion to dismiss), a district court rejected plaintiff claims that Exxon Mobil 401(k) fiduciaries knew or should have known that the price of the stock was inflated.
Corey Rosen
Judge Trims Back DOL Claims on Valuation, Personal Liability of Trustee in ESOP Case
In Acosta v. Vinoskey, No. 6:16-cv-00062-NKMRSB, (W.D. Va., April 17, 2018, order on summary judgment motions 4/17/18), a federal court allowed a case against the ESOP at Sentry Equipment Corporation to proceed, but only after sharply cutting back on some of the DOL’s claims.
Corey Rosen
DOL settles lawsuit relating to Cactus Feeders ESOP transaction
In Acosta v. Cactus Feeders, Inc., et al., 2:16-cv-00049-J-BR (N.D., Tex., May 4, 2018), the insurers for Cactus Feeders, certain of its present and former directors, officers and members of its ESOP Committee, and Lubbock National Bank (the ESOP trustee) agreed to pay $5.4 million into the Cactus Feeders ESOP to settle a lawsuit initiated by the DOL alleging that the appraisal for a transaction that increased the ESOP’s ownership of Cactus Feeders from 30% to 100% did not adequately adjust for the alleged dilutive impact of warrants and stock options, did not apply a discount for lack of marketability, and did not include a discount for lack of control.