In yet another ESOP development, the Secretary of Labor recently announced that it reached a settlement with Wilmington Trust NA, an international financial services firm with expertise in serving as trustee in major ESOP transactions.
The DOL’s news release, dated April 30, 2020, says the settlement ends three DOL lawsuits and 18 investigations by the Employee Benefits Security Administration (EBSA) against Wilmington Trust. All proceedings alleged that Wilmington Trust breached its ERISA duties by causing the respective ESOP to overpay for company stock.
The settlement requires Wilmington Trust to pay $80 million to 21 ESOPs as well as $8 million to the government for the losses it allegedly caused to the ESOPs. In agreeing to the settlement, Wilmington does not admit or deny the allegations.
For more details on the companies whose ESOP transactions gave rise to the suits and allegations, click here.
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