On June 25, 2014, in an unexpected development at the end of its current term, the U.S. Supreme Court held in Fifth Third Bank v. Dudenhoeffer that ESOP fiduciaries are not entitled to a “presumption of prudence” in connection with their decision to invest in or maintain investments in employer stock. In a unanimous opinion
ESOPs
U.S. Stepping Up Scrutiny of ESOPs
By Kevin LaCroix on
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 …
U.S. Supreme Court to Consider Presumption of Prudence in ERISA Stock Drop Case
By Kevin LaCroix on
Posted in ERISA
The U.S. Supreme Court has already taken up a case this term that potentially could alter the way private securities cases are litigated. The Court has now granted cert in a different case that could have a significant impact on ERISA stock-drop litigation. On December 13, 2013, the Court granted the petition of defendant Fifth…