The D&O Diary

The D&O Diary


Category Archives: ERISA

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U.S. Stepping Up Scrutiny of ESOPs

Posted in ERISA
According to a June 23, 2014 Wall Street Journal article entitled “U.S. Increases Scrutiny of Employee-Stock Ownership Plans” (here), the federal government is “stepping up scrutiny of how U.S. companies are valued for employee-stock ownership plans.” This increased scrutiny includes increased litigation activity, often alleging that ESOP share valuations are flawed. The targets of this… Continue Reading

First Circuit: Private Equity Fund Liable for Bankrupt Portfolio Company’s Pension Obligations

Posted in ERISA
On July 24, 2013, in a case the court said was one of “first impression,” the First Circuit held that, due to the nature of its involvement in the management of its portfolio company’s operations, a private equity firm was potentially liable for the portfolio company’s pension obligations. The decision has significant implications for the… Continue Reading

Guest Post: Fiduciaries First — Understanding the Scope of Fiduciary Liability Insurance Coverage and New York’s IBM Decision

Posted in D & O Insurance, ERISA
I am pleased to publish below a guest post from my good friend Kimberly M. Melvin and her colleague John E. Howell, both of the Wiley Rein LLP law firm. Kim and John’s article discusses a recent decision from New York’s high court and its implications for the scope of coverage under a fiduciary liability… Continue Reading

Plaintiffs Substantially Prevail in Two Subprime Lawsuit Dismissal Motion Rulings

Posted in ERISA, Subprime Litigation
The conventional view is that plaintiffs may be faring poorly in many of the subprime-related cases. However, plaintiffs have in fact been doing relatively better in ’33 Act claims brought by purchasers of mortgage-backed securities. A recent ruling in the Wells Fargo Mortgage-Backed Certificates Litigation, in which a significant number of plaintiffs’ claims survived the defendants’ motions… Continue Reading

Plaintiffs’ Extract Some Subprime Lawsuit Dismissal Motion Success

Posted in ERISA, Subprime Litigation
In several prior posts (most recently here), I have noted that defendants seem to be faring particularly well at the dismissal motion stage in the subprime and credit crisis-related lawsuits. However, in recent dismissal motion rulings in two subprime-related cases, one in a securities class action lawsuit and one in an ERISA class action lawsuit,… Continue Reading

The List: ERISA Class Action Lawsuit Settlements

Posted in ERISA
As D&O maven Dan Bailey noted in a recent memo (here), ERISA class action litigation represents a significant and growing liability exposure for benefit plan fiduciaries. With the recent addition of the $70.5 million settlement in the Tyco ERISA class action lawsuit (about which refer here) and the $55 million settlement in the Countrywide ERISA… Continue Reading

Countrywide Settles Subprime-Related ERISA Lawsuit

Posted in ERISA, Subprime Litigation
In a noteworthy subprime-related litigation development, on August 5, 2009, the parties to the Countrywide ERISA action filed a stipulation of settlement (here), together with a request for preliminary court approval. Under the stipulation, the case is to be settled by a payment of $55 million, to be funded entirely by Countrywide’s fiduciary liability insurers.… Continue Reading

Defense Prevails in Tellabs ERISA Stock Drop Case

Posted in ERISA
A frequent securities class action lawsuit accompaniment is a companion ERISA stock drop lawsuit brought on behalf of employee participants in the defendant company’s benefit plan. These ERISA lawsuits have in recent years resulted in a string of impressive settlements, although the plaintiffs have not fared as well in the few cases that have actually… Continue Reading

Dismissal Denied in Subprime-Related ERISA Action

Posted in ERISA, Subprime Litigation
In a subprime-related lawsuit that highlights the advantages ERISA claimants may have over litigants seeking relief under the securities laws, a federal court has refused to dismiss the complaint filed under ERISA on behalf of benefits plan participants of NovaStar Financial.   In an opinion dated February 11, 2009 (here), Judge Nanette K. Laughrey of… Continue Reading

Now, Madoff-Related ERISA Litigation

Posted in ERISA, Madoff Litigation
In a case demonstrating the range of both the potential legal theories and the prospective litigants that could become involved in Madoff-related litigation, a pension fund has filed an ERISA class action against an investment advisory firm for the advisory firm’s investment of the pension fund’s assets in a Madoff "feeder fund."   On February… Continue Reading

First the Home Loan Workout, Then the Investor Lawsuit?

Posted in ERISA, Subprime Litigation
On November 11, 2008, Citigroup (here) and Fannie Mae and Freddie Mac (here) announced plans to modify existing home loans in an attempt to help borrowers avoid further foreclosures.   These mortgage relief efforts unquestionably are constructive, even praiseworthy. But as noted on the Real Time Economics blog (here), these efforts represent only a “drop… Continue Reading

Headline News: Settlements, Lawsuits, Dismissals

Posted in ERISA, Options Backdating, Securities Litigation
About the UnitedHealth Group Class Action Settlement: UnitedHealth Group announced on July 2, 2008 (here) that it reached an agreement to settle its high profile options backdating-related securities class action lawsuit for $895 million. A July 3, 2008 article discussing the settlement can be found here.   Not only is this settlement the largest… Continue Reading

Fiduciary Liability: Seventh Circuit Upholds Arthur Anderson’s Insurer’s Coverage Denial

Posted in ERISA
In an April 9, 2008 opinion (here) written by Chief Judge Frank Easterbrook, the Seventh Circuit held that there was no coverage under Arthur Anderson’s fiduciary liability policy for the firm’s settlement of a retiree pension benefits dispute. The dispute arose after the firm’s Enron-related difficulties undercut the firm’s ability to honor retirees’ demands for… Continue Reading

Subprime-Related Derivative Lawsuits: The List

Posted in ERISA, Shareholders Derivative Litigation, Subprime Litigation
Regular readers know that I have been tracking subprime-related class-action lawsuits (here). In a recent post, I noted my interest in trying to develop a similar list of subprime-related derivative lawsuits. In response to my request, a number of readers supplied helpful information, and as a result I have been able to develop a list… Continue Reading

The LaRue Decision: ERISA Liability and Insurance Issues

Posted in ERISA
On February 20, 2008, the United States Supreme Court issued a unanimous holding (here) in LaRue v. DeWolff, Boberg & Associates that ERISA authorizes individual defined contribution plan participants to sue for fiduciary breaches that impair the value of plan assets in the individual’s plan account. This holding could have important implications for future ERISA… Continue Reading

Companies Sound “All Clear” on Options Backdating

Posted in ERISA, Options Backdating
Earlier in the summer, it was a seemingly daily occurrence for one or more public companies to announce that they were launching internal probes of their options practices. (These announcements were accompanied, and no doubt encouraged, by numerous simultaneous announcements of SEC probes, U.S. Attorney’s subpoenas, and the like.) Now as the summer has, alas,… Continue Reading