ESOP Litigation: Recent Cases, Legal Theories, Prohibited Transactions, Disputes Involving Service Providers

Strafford

This CLE course will guide counsel on procedures and fiduciary responsibilities in employee stock ownership plan (ESOP) administration and compliance, review recent court rulings, and offer tactics for handling litigation involving ESOPs. The panel will discuss best practices in satisfying fiduciary duties in ESOP transactions, legal issues that arise, and lessons learned from recent cases to defend against and minimize litigation.

Description

An ESOP is a tax-qualified defined contribution employee benefit plan that invests in the plan sponsor's stock. ERISA provides strict rules for trustees and administrators of ESOPs, and transactions involving ESOPs may lead to regulatory investigations or litigation.

Many complex issues arise when an ESOP company purchases or sells the stock. ESOP fiduciaries face essential ERISA fiduciary standards and valuation issues. Recent lawsuits concerning ESOP transactions involve claims that (1) selling shareholders sold their stock in the plan sponsor to the ESOP at an inflated price; (2) fiduciaries of the ESOP took insufficient action to protect the interests of participants, particularly when the plan sponsor faced financial difficulties; or (3) management or other purchasers bought the ESOP's shares for less than they were worth.

Counsel must understand key legal theories and potential defenses along with recent trends in ESOP litigation in order to effectively implement appropriate litigation strategies for clients.

Listen as our panel discusses best practices in satisfying fiduciary duties in ESOP transactions, legal issues that arise, and lessons learned from recent litigation to defend and minimize litigation.

Outline

1. Fiduciary duties, policies, and procedures of ESOP transactions
2. Recent court rulings and developments
3. Key ESOP litigation tactics and missteps to avoid
4. Best practices for defending and minimizing litigation

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