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 a detailed decision, in Hurtado et. al. v. Rainbow Disposal Co., Inc. Employee Stock Ownership Plan, 8:17-cv-01605-JLS-DFM (C.D. Cal, July 9, 2018) the judge refused to grant summary judgment to the executives and ESOP Committee of Rainbow Disposal, as well as GreatBanc Trust and various other individuals.
Corey Rosen
In HC4, Inc. Employee Stock Ownership Plan v. HC4, Inc, 4:15-CV- 872 (S.D. TX, Houston Division, July 12, 2018), a district court granted summary judgment to HC4, which was sued as the fiduciary for the company’s failed ESOP.
Corey Rosen
In Wilson v. Edison Int’l Inc., C.D. Cal., No. 2:15-cv-09139- JAK-PJW (C.D. Cal., May 29, 2018), a district court again ruled that Edison Electric executives were not liable for not removing company stock in the 401(k) plan in the face of falling stock prices.
Corey Rosen
In Kopp v. Klein, No. 16-11590 5th Cir., June 27, 2018), employees at Idearc lost an appeal of a lower court ruling over the loss of their company stock value in the bankruptcy of Idearc, a Verizon spinoff. Employees contended executives conspired to conceal information that should have led trustees to eliminate Idearc stock from the 401(k) plan.
Corey Rosen
In Dormani v. Target Corp., No. 0:17-cv-04049-JNESER (D-Minn, June, 15, 2018) a district court again ruled that Target’s not freezing company stock as a choice in the 401(k) plan was not a fiduciary violation.
Corey Rosen
In TBM Consulting Grp., Inc. v. Lubbock Nat’l Bank, No. 5:17-cv-00460-FL (E.D.N.C, May 31, 2018), a court rejected Lubbock National Bank’s argument that the executives of TBM Consulting lacked standing to sue on behalf of the plan because they were unrepresentative of the class and/or they did not provide adequate procedural safeguards to demonstrate that they could be.
Corey Rosen
In Preston v. Acosta No. 17-1238 (U.S., June 25, 2018), the Supreme Court refused to hear a challenge to an 11th Circuit decision (Preston v. Acosta, Oct. 12, 2017) that ruled that the CEO and trustee of the ESOP at TPP Holdings could not invoke a tolling agreement to halt a DOL lawsuit alleging that he had caused the ESOP at the company to overpay for the purchase of his shares in 2006 and again in 2008.
Corey Rosen
Employees of the Bradford Group, an ESOP-owned catalog company, received class status in a suit contending the ESOP overpaid for the stock by $56 million.
Corey Rosen
The Supreme Court asked the Department of Labor to file a brief concerning the issue of burden-shifting in cases alleging a fiduciary breach. Circuits have split on the issue.
Corey Rosen
SunTrust Banks agreed to settle a 10-year-old lawsuit alleging that plan fiduciaries allowed employees to invest in SunTrust Banks stock when they knew or should have known that the stock was artificially inflated.
