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U.S. Supreme Court Abolishes the Presumption of Prudence in ERISA Stock Drop Cases

A recurring scenario in ERISA litigation involves claims against fiduciaries of 401(k) retirement plans who are alleged to have breached their fiduciary duty by failing to discontinue investment in employer stock following a...more

Supreme Court Rejects Presumption of Prudence for ESOP Fiduciaries

On June 25, 2014, the Supreme Court of the United States, in Fifth Third Bancorp v. Dudenhoffer, declared that no “presumption of prudence” applied to fiduciaries of “employee stock ownership plans” (ESOPs). ...more

Supreme Court Axes "Presumption of Prudence" in ESOP Stock-Drop Cases

On June 25, 2014, the U.S. Supreme Court issued a decision that gives comfort to "stock-drop" plaintiffs and may cause shockwaves among employee stock ownership plan (ESOP) fiduciary committees. In Fifth Third Bancorp v....more

Supreme Court Rejects “Presumption of Prudence,” Adopts New Pleading Standards in Fifth Third Bancorp v. Dudenhoeffer

The Supreme Court of the United States has issued its highly anticipated decision in Fifth Third Bancorp v. Dudenhoeffer, No. 12-751. In an opinion written by Justice Breyer for a unanimous court, the Supreme Court held...more

DOL Settlement Is a Cautionary Tale for ESOP Trustees

The Department of Labor (DOL) recently settled a case involving an employee stock ownership plan (ESOP) that provides guidance but also a warning for trustees and employers contemplating ESOP transactions that later go awry....more

The Supreme Court Of The United States Holds That ESOP Fiduciaries Are Not Entitled To A Presumption Of Prudence, Clarifies...

On June 25, 2014, the Supreme Court of the United States unanimously held that there is no special presumption of prudence for fiduciaries of employee stock ownership plans (“ESOPs”). Fifth Third Bancorp v. Dudenhoeffer, No....more

Sharply Divided Illinois Supreme Court Narrows Circuit Court Jurisdiction Over Pension Board Decisions

In its second significant decision on public employee pensions of the morning, the Illinois Supreme Court has reversed the Appellate Court in The People ex rel. Madigan v. Burge. In an opinion by Justice Anne M. Burke, joined...more

ESOP Fiduciaries Not Entitled to Presumption of Prudence

In Fifth Third Bancorp v. Dudenhoeffer, the U.S. Supreme Court unanimously held that there is no presumption of prudence for fiduciaries of an employee stock ownership plan (ESOP) who invest in employer securities. The case...more

Supreme Court Abolishes Presumption of Prudence in ERISA Stock-Drop Cases But Sets High Bar for Plaintiffs

In an opinion that reversed nearly two decades of lower-court ERISA class action jurisprudence, the Supreme Court axed the well-established “presumption of prudence” in ERISA “stock-drop” cases. On June 25, the Court issued...more

ESOPs’ Fables: On Winning Wars but Losing Battles

As the end of the Supreme Court term approached, decisions came down fast and furious. Last week’s big decisions, at least around our nerdish water cooler, were Halliburton and Fifth Third Bancorp v. Dudenhoeffer. (Yes, we...more

Supreme Court’s Dudenhoeffer Decision Headlines New ERISA Litigation Update

Goodwin Procter’s ERISA Litigation Practice published its latest quarterly ERISA Litigation Update. The update discusses (1) the Supreme Court’s ruling in Fifth Third Bancorp v. Dudenhoeffer that there is no “presumption of...more

Second Circuit Affirms Dismissal of Stock Drop Challenge on Grounds Unrelated to Moench

Prior to the Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, the central issue in nearly every case alleging the imprudent investment of plan assets in employer stock has revolved around whether plan...more

Dudenhoeffer Eschews Moench Presumption But Encourages Careful Scrutiny Of Complaints: Future for ERISA Stock-Drop Litigation Is...

Certain retirement plans, such as employee stock ownership plans (“ESOPs”), are specifically designed to invest all or a portion of their assets in stock of the sponsoring employer. For nearly twenty years, the federal courts...more

In ERISA Stock Drop Case, Supreme Court Giveth and Taketh Away on Moench Presumption

The U.S. Supreme Court recently eviscerated a key protection against stock drop lawsuits filed by participants in defined contribution plans that hold employer stock as an investment. In Fifth Third Bancorp et al. v....more

One, Two Punch for Moench – Supreme Court Eliminates Presumption for Employer Stock Investments

The United States Supreme Court issued a unanimous opinion on June 25, 2014 in the case of Fifth Third Bancorp v. Dudenhoeffer. While the Supreme Court’s holding substantially affects the fiduciaries of all employee stock...more

U.S. Supreme Court Releases Two Major Securities Opinions

Earlier this week, the U.S. Supreme Court released its decision in Halliburton Co. v. Erica B. John Fund, Inc., (U.S., No. 13-317)( Halliburton II), and for a second time vacated a decision by the Fifth Circuit on whether the...more

Supreme Court Does Away with the Presumption of Prudence: What's Next for Employer Stock Funds in 401(k) Plans and ESOPs?

On June 25, 2014, the United States Supreme Court issued its much anticipated “stock drop” decision in Fifth Third Bancorp v. Dudenhoeffer, ___ U.S. ___ (2014). The Court, in vacating the Sixth Circuit’s ruling, held that...more

Supreme Court Strikes Down Presumption of Prudence to ESOP Fiduciaries

In Fifth Third Bancorp v. Dudenhoeffer,1 the U.S. Supreme Court yesterday held that ESOP (employee stock ownership plan) fiduciaries are not entitled to any special presumption of prudence and are subject to the same duty of...more

Supreme Court Decides ESOP Fiduciary Duty Case: Fifth Third Bancorp et al. v. Dudenhoeffer et al.

On June 25, 2014, the U.S. Supreme Court decided Fifth Third Bancorp et al. v. Dudenhoeffer et al., No. 12-751, holding that a fiduciary of an employee stock ownership plan (ESOP) is subject to the same duty of prudence that...more

U.S. Supreme Court Decision Will Lead to Intense Scrutiny of ESOP Fiduciaries

The United States Supreme Court issued a decision yesterday that will result in significant changes to employee stock ownership plan ("ESOP") administration and design, which could jeopardize the viability of stand-alone...more

FIFTH THIRD BANCORP v. DUDENHOEFFER: Supreme Court Rejects special “Presumption of Prudence” for Employer Stock

Fiduciaries of Employee Stock Ownership Plans (ESOPs), defined contribution plans that include an ESOP, and plans that include employer stock have generally been able to rely on a special “presumption of prudence” when...more

SEC Integrates Two Exempt Reporting Advisers to Determine Advisers Act Registration Status

The SEC settled public administrative proceedings against TL Ventures Inc., a venture capital fund adviser (the “VC Fund Adviser”) and Penn Mezzanine Partners Management, L.P. (the “Private Fund Adviser” and with the VC Fund...more

News Flash: ESOP Fiduciaries May Obey the Law

The U.S. Supreme Court ruled in Fifth Third Bancorp et al. v. Dudenhoeffer, No. 12-751 (U.S. June 25, 2014), that no special presumption of prudence applies to the decision by ESOP fiduciaries to buy and hold stock of the...more

Supreme Court Clarifies ESOP Fiduciaries’ Obligations

On June 25, 2014, the Supreme Court of the United States ruled that a fiduciary of an “employee stock ownership plan” (ESOP) is subject to the same duty of prudence that the Employee Retirement Income Security Act (ERISA)...more

"Supreme Court Holds No Presumption of Prudence for ESOP Fiduciaries"

Today, in a unanimous decision, the Supreme Court of the United States held in Fifth Third Bancorp v. Dudenhoeffer that fiduciaries of employee stock ownership plans (ESOPs) that invest in the employer’s securities are not...more

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