Trustee Liable for Inadequate ESOP Valuation Vetting

BVLaw
Court Case Digests
March 13, 2017

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ESOP valuations
damages, control premium, discount rate, expert testimony, discounted cash flow (DCF), fair market value (FMV), multiple, projections, guideline company method, enterprise value (MVIC), employee stock ownership plan (ESOP), adequate consideration, erisa, company specific risk, fiduciary duty
Brundle v. Wilmington Trust N.A. (I)
241 F. Supp. 3d 610 (E.D. Va. 2017), 2017 U.S. Dist. LEXIS 35811
US
Federal Court
Virginia
United States District Court
Stout Risius Ross (ESOP valuation); Dana Messina (plaintiff); Jeff Tarbell (defendant/trustee)
Brinkema

Summary

Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.

See Also

Brundle v. Wilmington Trust N.A. (I)

Full Text of Court Cases
March 13, 2017

Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.

Trustee Liable for Inadequate ESOP Valuation Vetting

BVLaw Case Update
June 2017

Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.