In the ongoing Brundle v. Wilmington Trust ESOP saga, which is now in the appeals stage, the Department of Labor recently filed an amicus brief in support of the district court’s $29.8 million judgment against the ESOP trustee.
The case arose out of a plan participant’s claim that the ESOP trustee breached its fiduciary duties to the plan by causing the ESOP to pay more than fair market value for the employer’s stock. The district court agreed, finding the trustee failed to adequately scrutinize the ESOP appraiser’s analysis and value conclusions. The court, in a subsequent ruling, conceded it had misunderstood some evidence and valuation concepts. But it found the errors were not material and did not change the outcome. The trustee and valuator had extensive ESOP experience.
After the trustee filed its appeal with the 4th Circuit Court of Appeals, the ASA in an amicus brief voiced strong support for the trustee and valuator and excoriated the district court for crediting the after-the-fact valuation of the plaintiff’s alleged inexperienced trial expert.
The DOL’s brief, in turn, asks the 4th Circuit to uphold the district court’s ruling. In a nutshell, the DOL argues the district court reviewed and judged the trustee’s performance in accordance with controlling case law and based on the evidence in front of the court.
For more details about the DOL’s brief, click here.