DOL Prevails on All Claims Against ESOP Trustee and Owner/Seller

BVLaw
Court Case Digests
August 2, 2019

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5084 Industrial Machinery and Equipment
423830 Industrial Machinery and Equipment Merchant Wholesalers
ESOP valuations
discount for lack of control (DLOC), discount rate, expert testimony, breach of fiduciary duty, capitalization rate, fair market value (FMV), overpayment, employee stock ownership plan (ESOP), working capital, adequate consideration
Pizzella v. Vinoskey (I)
2019 U.S. Dist. LEXIS 129579
US
Federal Court
Virginia
United States District Court
Dana Messina (plaintiff/DOL); Frank (“Chip”) Brown, Howard Kaplan (defendants/trustee and owner)
Norman K. Moon

Summary

Trial court finds ESOP trustee liable for causing plan to overpay for company stock; trustee failed to adequately respond to red flags in ESOP appraisal and did not act solely in the interest of ESOP, court says; owner is liable for accepting price he knew to be above stock’s fair market value.

See Also

Pizzella v. Vinoskey (I)

Full Text of Court Cases
August 2, 2019

Trial court finds ESOP trustee liable for causing plan to overpay for company stock; trustee failed to adequately respond to red flags in ESOP appraisal and did not act solely in the interest of ESOP, court says; owner is liable for accepting price he knew to be above stock’s fair market value.