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Breach of Duty Employee Stock Ownership Plans

Holland & Knight LLP

Arkansas Court Declines to Dismiss Challenge to ESOP Releveraging Transaction

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The U.S. District Court for the Western District of Arkansas issued its written decision in Shipp v. Central States Manufacturing, Inc. on July 5, 2024, declining to dismiss the case against Central States Manufacturing Inc....more

Foley & Lardner LLP

Five Things on the Department of Labor’s Radar for Employee Benefit Plans

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All qualified retirement plans are subject to a myriad of requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The United States Department of Labor (DOL) is charged with enforcing the...more

Proskauer - Employee Benefits & Executive...

Putative ESOP Class Action Dismissed for Failure to Exhaust Administrative Remedies

The decision in Bolton v. Inland Fresh Seafood Corp. of America Inc., No. 22-cv-4602 (N.D. Ga. Dec. 5, 2023)should serve as a reminder to all ERISA practitioners that, if litigating in courts of the Eleventh Circuit,...more

Proskauer - Employee Benefits & Executive...

District Court Enforces Arbitration Clause in ERISA Plan Document

A federal district court judge in the Eastern District of Kentucky has enforced an ESOP’s arbitration clause, sending P.L. Marketing Inc. employees’ breach of fiduciary duty claims on behalf of a putative class to individual...more

Faegre Drinker Biddle & Reath LLP

Thinking ESOPs: Why Aren’t Courts Conducting the 'Context-Specific' Inquiry Into Complaints That the Supreme Court Requires?

Recently, several appellate-level court decisions have affirmed dismissals of ERISA fiduciary-breach claims involving 401(k) plans. These decisions followed the Supreme Court’s decision earlier this year in a 403(b) case, in...more

Holland & Knight LLP

Court Compels Proposed ESOP Class to Individual Arbitration Based on Plan Document

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Historically, courts around the country have approached the enforceability of class action waivers and arbitration provisions in ESOP and Employee Retirement Income Security Act of 1974 (ERISA) plan documents differently,...more

Faegre Drinker Biddle & Reath LLP

Thinking ESOPs: Courts Desperately Need Contextual Clues in Disputes Over Enforceability of Arbitration Provisions

Enforcement of an ERISA plan’s arbitration provision has become a hotly litigated issue. Plaintiffs and courts often raise two objections to arbitration provisions in ERISA plans, including ESOPs. The first is whether...more

Bond Schoeneck & King PLLC

Important Recent ESOP Developments 

There were several significant legal developments relating to employee stock ownership plans (ESOPs) last year. This information memo will summarize a few of the most important developments. ...more

Jones Day

Second Circuit Adopts "Control Test" for Imputation of Fraudulent Intent in Bankruptcy Avoidance Litigation

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In yet another chapter in the tortured saga of the fallout from the failed 2007 leveraged buyout ("LBO") of media giant The Tribune Co. ("Tribune") in a transaction orchestrated by real-estate mogul Sam Zell, the U.S. Court...more

Polsinelli

ESOPs Win Big in Hawaii Court Case

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The Federal District Court for Hawaii recently determined that no violations of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) were established by the U.S. Department of Labor (“DOL”) in a breach of...more

Faegre Drinker Biddle & Reath LLP

ERISA Litigation Roundup: Northern District of Illinois Dismisses ERISA Stock-Drop Suit

On August 23, 2021, the U.S. District Court for the Northern District of Illinois dismissed an ERISA stock-drop lawsuit brought against fiduciaries of Kraft Heinz Food Company’s employee stock ownership plan (ESOP), holding...more

Holland & Knight LLP

Ruling: ERISA Does Not Preempt Certain State-Law Claims Against "Dual-Hat" Officers, Directors

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In Halperin v. Richards, the U.S. Court of Appeals for the Seventh Circuit considered whether the Employee Retirement Income Security Act of 1974 (ERISA) preempted certain state-law corporate liability claims against officers...more

Proskauer - Employee Benefits & Executive...

District Court Denies Interlocutory Appeal for Novel Issue of “Hardwired” 401(k) Plans

A federal district court in Maryland recently declined to certify an interlocutory appeal to the Fourth Circuit on the issue of whether financial institutions can “hardwire” a preference for their own proprietary investment...more

Faegre Drinker Biddle & Reath LLP

Thinking ESOPs: What the Supreme Court’s Decision in a 401(k) Fee Case Could Mean for ESOPs

The U.S. Supreme Court recently agreed to hear a challenge to the dismissal of an Employee Retirement Income Security Act (ERISA) 401(k) excessive fee case. The case involves a question about whether jury trials are...more

Jackson Lewis P.C.

Failure To Identify Specific Viable Alternative Action Dooms Stock Drop Claim

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The Ninth Circuit recently affirmed the dismissal of an ERISA employer-stock drop putative class action, holding that the plaintiff’s failure to identify specific, viable alternative actions that plan fiduciaries should have...more

Holland & Knight LLP

Courts Split on Class Action Waivers, Arbitration Provisions in ERISA Litigation

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Courts have struggled through the years when considering the enforceability of mandatory class action waivers and arbitration provisions contained within Employee Retirement Income Security Act of 1974 (ERISA) plans and other...more

Polsinelli

Illinois Court Strikes Down ESOP’s Arbitration Provision

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Over the past few years, qualified retirement plans, including employee stock ownership plans (ESOPs) have been adding provisions requiring participant breach of fiduciary duty claims to be resolved through mandatory...more

Dechert LLP

A Look at the Current State of ERISA Class Action Litigation

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This OnPoint is the first in a series that will examine important trends and developments in class action litigation under the Employee Retirement Income Security Act of 1974 (ERISA).  Here, we look at the current litigation...more

Vinson & Elkins LLP

Stock Drop Litigation Cases Are On The Rise: Will Your Retirement Plan Be A Target?

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Key Takeaways- •Stock price plunges caused by COVID and current market conditions create fertile ground for stockholder litigation, including claims by participants in retirement plans funded with employer securities that...more

Burr & Forman

If Your Retirement Plan Holds Employer Securities, Keep an Eye on the Jander Case

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“Employer securities” in retirement plans have been the source of a significant amount of litigation under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In general, “employer securities” are...more

Holland & Knight LLP

Something Old, Something New and Something Borrowed in Latest DOL Process Agreement

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On the same day that the U.S. Department of Labor (DOL) filed a lawsuit against the Farmers National Bank of Danville (FNB) and the Weddle Brothers Construction Company Inc. Employee Stock Ownership Plan, the parties agreed...more

Locke Lord LLP

U.S. Supreme Court Remands “Stock Drop” Case Back to Second Circuit

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The United States Supreme Court, in a per curiam decision, declined to address whether plan participants sufficiently alleged breach of fiduciary duty claims under the Employee Retirement Income Security Act of 1974, as...more

ArentFox Schiff

Supreme Court Opinion Sheds No Light on Elusive Stock-Drop Pleading Standard

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In January, the Supreme Court issued its highly anticipated opinion in Retirement Plans Committee of IBM v. Jander, No. 18-1165, a case that promised to clarify the pleading standard applicable to ERISA stock-drop cases. But...more

Groom Law Group, Chartered

Supreme Court Vacates & Remands Plaintiff-Friendly Ruling in IBM “Stock Drop” Litigation

Brief Takeaway:  Plan sponsors that offer employer stock in their benefit plans can breathe a sigh of relief, as the Supreme Court vacated one of the only plaintiff-friendly rulings in ERISA “stock drop” litigation.  ...more

Seyfarth Shaw LLP

Supreme Court Remands Case Back Seeking Clarification of the Dudenhoeffer Pleading Standard

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In Retirement Plans Committee of IBM v. Jander, the Supreme Court, in a unanimous opinion, clarified the its opinion in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014), which set forth the duties that administrators...more

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