The lawsuit alleges a series of bad-faith dealings were made that caused losses to the ESOP while benefiting executives.
Tag: employee stock ownership plans
The DOL alleged Wilmington Trust caused losses to ESOPs when it authorized them to pay more than fair market value for privately held employer stock.
A judge previously found eliminating ESOP participants’ right to invest in company stock is not a violation of ERISA’s anti-cutback provisions, but forcing participants with balances greater than $5,000 out of the plan may be.
The motion cites as one reason for settlement “probable costs, in both time and money, of continued litigation.”
A federal court judge found a severance agreement was broad enough to cover Employee Retirement Security Act (ERISA) claims against the trustee of an employee stock ownership plan (ESOP).
Since there are no prescribed correction methods to address Internal Revenue Code Section 409(p) violations, prevention methods are important considerations for both employee stock ownership plan design and operation, the IRS says.
For the third year in a row, respondent companies to the ESOP Association's annual survey saw profits rise more than revenue, and a more than half of companies contributed more to their ESOPs than the average 401(k) match.
A letter to the president from members of Congress asks for protection against the DOL's practice of “regulation through litigation.”
"As businesses become more aware of employee ownership's advantages—which include higher corporate performance, a share in the rewards for employees, and a retirement plan that often outperforms other alternatives—it is easy to see employee ownership increasing,” said ESOP Association President J. Michael Keeling.
Plaintiffs in the lawsuit are participants and beneficiaries of the Rainbow Disposal Co., Inc. Employee Stock Ownership Plan, who seek to restore losses to the plan and to otherwise remedy a complicated series of alleged breaches of fiduciary duty.
It would provide $500 million in support of employee stock ownership plan (ESOP) programs and would operate through the Small Business Administration.