News Tag: overpayment


ASA squarely aligns itself with trustee and appraiser in Brundle ESOP litigation

One of the most controversial ESOP cases, Brundle v. Wilmington Trust, has now entered the appeals court phase. In 2017, the district court found that the trustee had caused the plan to overpay by $29.8 million by failing to scrutinize the financial advisor’s obviously flawed valuation analysis and value conclusions. The trustee and valuator had strong ESOP credentials. Read more >>

ESOP case alive (for now), but court limits damages testimony under Daubert

In a developing ESOP case, the government recently suffered a setback when the court agreed with the trustee that portions of the damages testimony the government’s expert proposed failed to hold up under the Daubert reliability prong. Read more >>

Court adheres to earlier ESOP liability and damages rulings

In a controversial ESOP case that turned on the trustee’s oversight of the pretransaction valuation work, the defendant trustee recently filed a motion for reconsideration. It argued the court had committed errors related to its liability and damages findings. Although the court owned up to some mistakes, including a misunderstanding of the concept of beta, it ultimately stuck to its earlier decision. Read more >>

Another ESOP trustee in trouble over valuation

For the second time in March 2017, a court found an ESOP trustee liable for causing the plan to overpay. The most recent decision chronicles in exhaustive detail how the trustee failed the plan in terms of ensuring that no more than fair market value would be paid for the seller’s shares. Read more >>

ESOP trustee’s failure to vet valuation causes significant overpayment

Inadequate trustee performance was at the center of a recent case, featuring a nontraditional ESOP structure. The court found that, if the trustee had engaged with the underlying valuation, it would have discovered numerous weaknesses and prevented the ESOP from overpaying for the company stock. Read more >>

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