In the well-publicized Vinoskey ESOP case (our latest coverage is here), the appellate court affirmed the district court in deciding that the company owner had extensive knowledge about the company and its prior valuations, and, thus, it was plausible to infer that “something was off.” There was no clear error in the district court finding that the owner violated ERISA.
Forgiven debt offset: However, the appellate court allowed an offset to damages for the debt the owner forgave. The American Society of Appraisers had filed an amicus brief in the appeal, and one issue it raised was that such debt forgiveness should be considered when assessing damages as per principles generally applied in valuation-related damages calculations.
The case is Walsh v. Vinoskey, 2021 U.S. App. LEXIS 35952, and a case analysis and full opinion are available on the BVLaw platform.