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 Hensiek v. Bd. of Dirs. of Casino Queen Holding Co., 20-cv-377-DWD (S.D. Ill. Sept. 6, 2024), a settlement was reached in the long-running case over the bankruptcy of Casino Queen, which had been a 100% ESOP. Plaintiffs alleged the ESOP’s 2012 purchase of the company for $170 million was based on excessively optimistic projections.
Corey Rosen
In Arborwell v. Alerus Financial, No. 4:23-cv-02770-DMR (N.D. Cal. June 24, 2024), a district court dismissed an unusual lawsuit against ESOP trustee Alerus Financial over the sale of Arborwell and its parent company SavATree to CI Quercus.
Corey Rosen
The SECURE 2.0 Act made a number of changes to rules for required minimum distributions (RMDs) from retirement plans. Most important, it extended the age at which RMDs must start and reduced penalties for failing to take one. On July 17, 2024, the IRS issued final rules for these distributions.
Corey Rosen
In Berman and Berman v. Commissioner, Nos. 202-13, 388-13 (US Tax Court, July 16, 2024), the Tax Court ruled taxpayers had to pay taxes on the disposition of qualified replacement property (QRP) they purchased after making a Section 1042 tax deferral election.
Corey Rosen
In Moore v. Virginia Community Bankshares, No. 3:19-cv00045 (W.D. Va. June 24, 2024), a settlement has been approved in a lawsuit alleging fiduciary improprieties in the sale of ESOP shares at Virginia Community Bank (VCB) prior to a merger.
Corey Rosen
In Su v. Ascent Construction, No. 23-4114 (10th Cir. June 24, 2024), the appeals court ruled that the president of a Utah construction company cannot appeal a preliminary injunction removing him as the fiduciary for the plan because the appeal was made moot by the district court making the preliminary injunction permanent.
Corey Rosen
In Nguyen v. Westlake Services Holding Company, No. 8:23-cv-00854 (C.D. Cal. June 28, 2024), the plaintiff alleged that Westlake Holding Company changed its ESOP rules in 2020 to allow the company to segregate accounts of former employees before their receiving a distribution as well as to allow a special interim valuation to reflect economic challenges arising from the pandemic.
Corey Rosen
In Bolton v. Inland Fresh Seafood, No. 1:22-cv-04602AT (N.D. Ga. Dec. 5, 2023), a court dismissed a lawsuit against Inland Fresh Seafood over the valuation of the company when it was sold to the ESOP in 2016 for $92 million.
Corey Rosen
In Shipp v. Central States, No. 5:23-CV-5215 (W.D. Ark. July 5, 2024), a district court ruled the plaintiffs had pleaded sufficient arguments to deny dismissal to the defendants, Central States Manufacturing and GreatBanc Trust, over charges that a releveraging at the 100% ESOP-owned company caused the share price for affected employees to fall improperly.
Corey Rosen
The 2023 National Defense Authorization Act created a pilot program, known as Sec. 874, that allows the DOD to award certain follow-on contracts without initiating a competitive process to an employee-owned business that meets the definition of a “qualified business.”
