No Prudent Investigation Into FMV Was Breach of Fiduciary Duty to ESOP

Business Valuation UpdateVol. 8 No. 7
Legal and Court Case Update
July 2002

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ESOP valuations
Chao v. Hall Holding Co., Inc.
285 F.3d 415, 2002 U.S. App. LEXIS 5929
April 3, 2002
US
6th Circuit
United States Court of Appeals
Bruce Den Uyl (for Chao)<br>James Cunningham (for Hall)<br>Karen Brown (for Hall)
Zatkoff

Summary

Secretary Chao of the U.S. Department of Labor brought action against Hall Holding Co. and others on the grounds that they breached their fiduciary duty by purchasing Hall Holding stock for the employee stock ownership plan (ESOP) without determination of fair market value of that stock.

See Also

Chao v. Hall Holding Co., Inc.

Full Text of Court Cases
April 3, 2002

In her complaint, the Secretary alleged that various components of an employee stock ownership plan (hereinafter "ESOP") for the benefit of employees of a subsidiary of Hall Holding Company violated the Employee Retirement Income Security Act.