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

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, November 29, 2023

Recorded event now available

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This CLE course will guide counsel on procedures and fiduciary responsibilities in employee stock ownership plan (ESOP) sales transactions, review recent court rulings, and offer tactics for handling litigation involving ESOPs. David Johanson 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 fiduciaries of ESOPs, and transactions involving ESOPs may lead to regulatory investigations or litigation.

Many complex issues arise when an ESOP purchases or sells stock. ESOP fiduciaries face strict ERISA fiduciary standards that often involve 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 expert presenter 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.

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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

Benefits

The panel will review these and other key issues:

  • Recent ESOP litigation, including new theories of liability
  • Critical steps during an ESOP transaction to avoid litigation risks
  • Handling ESOP litigation and pitfalls to avoid, including important privilege issues in the evidentiary record for an ESOP transaction

Faculty

Johanson, David
David R. Johanson

Senior Partner
Hawkins Parnell & Young

Mr. Johanson assists clients in general corporate matters and in employee ownership, benefit, ERISA, and related...  |  Read More

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