trustee indemnification

[Guest Smokin]

An independent trustee candidate for a directed account holding employer stock wants to be indemnified for negligent acts other than breaches of fiduciary duty. The trustee does not seek indemnification for willful acts or gross negligence. What specific risk is the trustee trying to address?

[k man]

one could only speculate but are you referring to an institutional trustee or an individual?

[Guest Smokin]

institutional trustee

[Jon Chambers]

At the risk of being glib, I doubt that they are seeking indemnity for any specific risk, rather, they seek indemnity for all breaches that are neither willful acts or gross negligence, or breaches of fiduciary duty. This could include any number of common law contractual breaches that would typically be state law claims that weren't preempted by ERISA.

[Kirk Maldonado]

The trustee could also be concerned about securites laws issues.

[Guest rmeigs]

This is pretty common practice for institutional trustees to seek indemnity for all breaches that are neither willful acts, gross negligence, or breaches of fiduciary duty.