Stock Drop Litigation

News & Analysis as of

Perspectives - Fall 2012 Volume 3, Edition 2: An Executive Compensation, Benefits & Human Resources Law Update

In this Issue: - Don’t “Moench”ion It: Supreme Court Rejects Presumption of Prudence for ESOP Fiduciaries - Avoiding Claims of Excessive Fund Fees - Risk of ERISA Class Actions Can Be Reduced by Use of...more

Benefits Litigation Update - Summer 2014

In this issue: - Recent Supreme Court Decisions Revise Rules for Stock Drop Cases - Hobby Lobby and the Questions Left Unanswered - Post-Amara Landscape Continues to Evolve - Supreme Court to...more

The ERISA Litigation Newsletter - July 2014

Editor's Overview - The end of the U.S. Supreme Court's term brought two significant ERISA decisions. The first concerns the standard of review that courts apply when evaluating ERISA stock-drop claims. As discussed...more

Supreme Court Rejects “Presumption of Prudence” in ESOP Cases

On June 25, 2014, the Supreme Court issued a decision in Fifth Third Bancorp v. Dudenhoeffer regarding the availability of relief against fiduciaries of an employee stock ownership plan (“ESOP”) for alleged breaches of the...more

Supreme Court Refocuses the 11th Circuit in its Review of an ESOP Fiduciary's Duty of Prudence.

Two years ago, when called upon to address an ESOP fiduciary’s duty of prudence in the context of a motion to dismiss, the 11th Circuit Court of Appeals followed a long line of cases: “We join our five sister circuits in...more

Supreme Court Rejects Presumption for ERISA Fiduciaries, But Makes Clear Stock-Drop Claims Are Difficult to Sustain

What you need to know: In Fifth Third Bancorp v. Dudenhoeffer, et al., decided earlier this month, the Supreme Court seemingly handed a victory to the plaintiff’s bar, striking down a presumption of prudence that ERISA...more

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 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

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

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

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

Employee Benefits Developments - June 2014

In This Issue: - Rulings, Opinions, Etc. ..Validating Rollover Contributions: New Guidance - Case ..Stock Drop Case Development: The Supreme Court Rejects The Presumption Of Prudence ..Dividend...more

Supreme Court Nixes "Presumption of Prudence" in Employer Stock Cases

On June 25, 2014, the U.S. Supreme Court unanimously rejected the "presumption of prudence" that had been applied by lower courts in cases where a retirement plan holds stock of the employer sponsoring the plan. Fifth Third...more

ESOP Fiduciaries Lose “Presumption of Prudence”

A unanimous U.S. Supreme Court held last week that employee stock ownership plan (ESOP) investment in employer stock is not entitled to a special ERISA “presumption of prudence”. The decision provides important guidance for...more

U. S. Supreme Court Clarifies Fiduciaries’ Duty of Prudence Under ERISA In Connection with Employee Stock Ownership Plans

On June 24, 2014, a unanimous Supreme Court held in Fifth Third Bancorp v. Dudenhoeffer that fiduciaries to an employee stock ownership plan (“ESOP”) were not entitled to a presumption under the Employee Retirement Income...more

Supreme Court Rejects “Presumption of Prudence” in ERISA Employer Stock Cases

The Court’s Dudenhoeffer decision also provides some guidance for scrutinizing such claims at the pleadings stage. On June 25, the U.S. Supreme Court issued its unanimous decision in Fifth Third Bancorp v....more

Supreme Court Strikes Down Presumption of Prudence For Fiduciaries Investing in Employer Securities

On June 25, 2014, the Supreme Court in Fifth Third Bancorp v. Dudenhoeffer unanimously held that no special presumption of prudence applies under ERISA for investments in employer stock. The case involved a form of employee...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

Supreme Court Rules No “Presumption of Prudence” for Employer Stock Plan Fiduciaries

In a decision that could have significant implications for certain companies and their 401(k) and other plans that invest in employer stock, the Supreme Court ruled, in Fifth Third Bancorp v. Dudenhoeffer, that there is no...more

Supreme Court Rejection of Duty of Prudence Presumption—What Does it Mean for Retirement Plans?

On June 25, 2014, the Supreme Court, in a unanimous decision, ruled in Fifth Third Bancorp v. Dudenhoeffer that there is no “presumption” of prudence extended to fiduciaries of employer stock ownership plans (“ESOPs”) in...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

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

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

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