I do a lot of litigation related to ESOPs, sometimes for them, and sometimes against them. One thing I have learned for sure over the years is that the well-run ESOPs, where everything is aboveboard and the fiduciaries are clearly acting – and want to act – in the interest of the employee participants, are
What the Disqualification of an ESOP Illustrates About ESOPs In General
By Stephen Rosenberg on
Posted in ESOP
Here’s a great little story by lawyer and blogger Jeffrey Cairns on the IRS disqualifying a professional practice’s ESOP based on significant operational defects, not the least of which was a failure to comply with the plan’s terms concerning eligibility. I like the post because it lays out the nature of the ESOP, the defects, …
My Exclusive Interview with Fiduciary News on ERISA Litigation
The good people at Fiduciary News gave me a soapbox, and I was happy to climb up on it. They interviewed me as part of their series of monthly interviews on ERISA and related topics, and I discussed ERISA litigation and a wide range of related issues. You can find the “Exclusive Interview: ERISA Attorney…
Follow the Money: What Happens to the Proceeds of Class Action Settlements
By Stephen Rosenberg on
When you read in the paper about a large settlement in an excessive fee case or other claim involving a 401(k), ESOP or other ERISA governed plan, do you think about what happens next, and about how to distribute the money among the plan participants? I do, in cases where I have represented the class…
Company Stock in Retirement Plans: Where Lies the Line Between Prudent and Imprudent Conduct?
By Stephen Rosenberg on
Chris Carosa at Fiduciary News highlighted this New York Times article in his twitter feed the other day, in which the author argued that there is no reason, from the point of view of a participant/employee, to hold large amounts of company stock in a retirement portfolio (as opposed to, say, as part of a …
The Wall Street Journal on Increased Oversight of ESOP Transactions
By Stephen Rosenberg on
Posted in ESOP
The Wall Street Journal ran an interesting, if superficial, story on tougher scrutiny of ESOP transactions and how that is impacting smaller companies with ESOP programs. As the article pointed out, ESOPs in that context are very much a tool for the owner/founder class to cash out their equity developed by building the business &ndash…
Clearing Out the Attic of My Mind: Notes From ACI’s 8th National Forum on ERISA Litigation
With all due apologies to longtime Globe sports columnist Dan Shaugnessy, who would periodically “clean out his desk” by running a column of short bits he had collected, here’s a list, in no particular order, of interesting (to me, anyway) items I took away from ACI’s excellent 8th National Forum on ERISA Litigation in…
Tatum v. RJR Pension Investment Committee: What it Teaches About Fiduciary Obligations
By Stephen Rosenberg on
Somehow, RJR Nabisco has always been fascinating, from beginning to now. There must be something about combining tobacco and Oreos that gets the imagination flowing; maybe its the combination of the country’s most regulated consumer product with the wonders of possibly the world’s favorite cookie. Heck, its birth even birthed a book and then, in…
What Should Employees Do in Response to Fifth Third Bancorp?
By Stephen Rosenberg on
Posted in ESOP
The Supreme Court’s decision in Fifth Third Bancorp, concerning the standards for prosecuting stock drop claims involving employer stock held in ERISA governed plans, certainly increased the attention paid to the question of the obligations of plan fiduciaries when it came to the risky holding of employer stock in a plan. But there is…
Why the Supreme Court Got It Right in Fifth Third Bancorp v. Dudenhoeffer
By Stephen Rosenberg on
So, where do we even begin with Fifth Third Bancorp v. Dudenhoeffer, which is, first, a fascinating decision and, second, one that has already inspired countless stories in both the legal and financial media? I thought I would begin by passing along some of the better commentary I have come across in the wake…