District Court Rules ‘Decisively’ Against the DOL in an ESOP Overvaluation Case

Court Case Digests
September 17, 2021
8711 Engineering Services
541330 Engineering Services
ESOP valuations
discount, fair market value (FMV), prohibited transaction, controlling interest, employee stock ownership plan (ESOP), stock valuation, fiduciary duty

Walsh v. Bowers
2021 U.S. Dist. LEXIS 177184
Federal Court
United States District Court
Steven J. Sherman (government); Mark Johnson (G); Greg Kniesel (Company); Gregory K. Brown (C); Ian C. Rusk (C); Kenneth J. Pia (C)


The Department of Labor sued the defendants, which included two individual owners, Bowers & Kubota Consulting Inc. and the Bowers & Kubota ESOP, alleging that the defendants had violated ERISA laws by manipulating data to induce the ESOP to pay $40 million for the shares of the individual shareholders that the DOL claimed was in excess of the fair market value of the shares. After extensive testimony of valuation experts and analysis of the facts of the case, the court determined that no ERISA violations have been established.

See Also

Walsh v. Bowers

A district court has ruled “decisively” against the Department of Labor (DOL) in an ESOP valuation case, stressing that the DOL failed to follow standard valuation practices.

This article also appears in:
Business Valuation UpdateVol. 27 No. 12