Bankruptcy Appellate Panel Denies Employee Members of ESOP Claims Against Debtors

BVLaw
Court Case Digests
June 2, 2023

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8049 Offices and Clinics of Health Practitioners, NEC
621330 Offices of Mental Health Practitioners (except Physicians)
bankruptcy, ESOP valuations
liquidation, stock, employee stock ownership plan (ESOP), debtor, fiduciary duty, distributions
Bennetti v. Oxford Restructuring Advisors LLC (In re Community Providers of Enrichment Services AZ Liquidating, Inc.)
2023 Bankr. LEXIS 1450; 2023 WL 3773642
US
Federal Court
9th Circuit
United States Bankruptcy Appellate Panel
Faris, Spraker, and Gan

Summary

Employee members of an ESOP had their claims against the debtors, based on cash option rights in an ESOP, denied. The debtors were not obligated to employees under the ESOP. The ESOP needed only to provide distributions in cash. There was no right of payment from the debtors. The U.S. Bankruptcy Appellate Panel for the 9th Circuit affirmed.

See Also

Bennetti v. Oxford Restructuring Advisors LLC (In re Community Providers of Enrichment Services AZ Liquidating, Inc.)

Full Text of Court Cases
June 2, 2023

Employee members of an ESOP had their claims against the debtors, based on cash option rights in an ESOP, denied. The debtors were not obligated to employees under the ESOP. The ESOP needed only to provide distributions in cash. There was no right of payment from the debtors. The U.S. Bankruptcy Appellate Panel for the 9th Circuit affirmed.