Willamette’s spring 2020 Insights focuses on ESOP valuations
The spring 2020 Insights from Willamette Management Associates focuses on ESOP employer stock valuations and contains a number of articles, such as “Employee Stock Ownership Plan Financial Feasibility Analysis: Financial Considerations for Shareholders” (Robert F. Reilly), “Valuation Treatment of the Repurchase Obligation Liability” (Kyle J. Wishing), “The Fiduciary Process for the Annual Update of the ESOP Share Value” (Frank “Chip” Brown), “Pizzella v. Vinoskey: A Costly Lesson to Learn” (Lisa H. Tran), and more.
Pension Rights Center files amicus brief in support of ESOP plaintiff
A nonprofit consumer organization whose mission is “to protect and promote the retirement security of American workers, retirees, and their families” recently filed an amicus curiae brief in support of the appeal the plaintiff in Lee filed with the 4th Circuit (see above).
DOL announces big ESOP settlement with Wilmington Trust
In yet another ESOP development, the Secretary of Labor recently announced that it reached a settlement with Wilmington Trust NA, an international financial services firm with expertise in serving as trustee in major ESOP transactions.
ESOP plaintiff appeals dismissal of lawsuit, leaning heavily on controversial Brundle case
In appealing the dismissal of her lawsuit with the 4th Circuit Court of Appeals, an ESOP plaintiff frequently invokes the Brundle case in which the same appeals court affirmed a $30 million judgment for the ESOP.
Projection Issues Raised in ESOP Litigation
Revenue growth rate, profit margins, and long-term growth rate can all meaningfully impact projections. Add in inconsistency with historical results, industry/economy impacts, and lack of adjustment for critical things such as compensation or capital expenditures, and it is easy to see how litigation can arise. Chip Brown, Chelsea Mikula, and Kyle Wishing help identify common issues raised in ESOP litigation cases (either by the Department of Labor or private plaintiffs) with respect to financial projections ...
Follow-up comments: How to deal with COVID-19 for Dec. 31, 2019, valuations
Harold Martin (Keiter) has the following additional comments regarding the appraisal discussed in last week’s BVWire article dealing with a valuation date of Dec. 31, 2019, and whether the impact of the coronavirus should be considered a subsequent event.
New DOL process agreement confronts control issue in ESOP valuations
The Department of Labor recently settled ESOP litigation with the trustee Farmers National Bank of Danville (FNB).
DOL Processing Agreement Contains Stringent Rules on Controlling Interest Transactions, Indemnification
Under new processing agreement between DOL and specific ESOP trustee, trustee is bound by strict rules on how to handle controlling-interest acquisitions and indemnification issues; trustee must ensure ESOP plan acquires a series of specified rights before approving payment of a control premium.
Scalia v. Farmers National Bank of Danville & Weddle Bros. Const. Co.
Under new processing agreement between DOL and specific ESOP trustee, trustee is bound by strict rules on how to handle controlling-interest acquisitions and indemnification issues; trustee must ensure ESOP plan acquires a series of specified rights before approving payment of a control premium.
Attack on DOL’s ability to seek monetary damages in Vinoskey ESOP case fails
In the contentious Vinoskey ESOP case, the trustee recently asked for a new trial, arguing the Secretary of Labor, representing the plaintiff, lacked the statutory authority to seek monetary damages on behalf of the ESOP and the court lacked the authority to hear this claim.
Trustee’s Post-Trial Attack on DOL’s Pursuit of Monetary Relief on Plan’s Behalf Crumbles
District court denies trustee’s motion for a new trial based on argument that Secretary of Labor lacked authority to pursue monetary relief against defendants; court says the plain language of the statute on which the DOL’s claims are based allows secretary to obtain damages on behalf of the ESOP.
Pizzella v. Vinoskey (II)
District court denies trustee’s motion for a new trial based on argument that Secretary of Labor lacked authority to pursue monetary relief against defendants; court says the plain language of the statute on which the DOL’s claims are based allows secretary to obtain damages on behalf of the ESOP.
2019 Key Business Valuation and Damages Cases
At the end of every year, BVLaw takes stock of valuation and damages cases that have dominated the conversation among financial experts by making law or influencing in some other way attitudes on key valuation issues. Here is our selection of 2019 cases by Sylvia Golden, Esq., BVR’s executive legal editor.
BVLaw Case Update: Kress, Vinoskey plus three more cases that dominated 2019
Join Jim Alerding, a veteran valuator, and Sylvia Golden, BVR’s legal editor, for a discussion of five of the most consequential valuation and damages cases of 2019. This selection of state and federal cases includes the year’s tax decisions that have reframed the conversation on tax affecting, a statutory appraisal case illustrating the Delaware Court of Chancery’s current approach to determining fair value, an ESOP trial court decision that solidifies the DOL’s litigation success, and ...
BVU News and Trends October 2019
A monthly roundup of key developments of interest to business valuation experts.
Court whittles down damages in Vinoskey ESOP case
The trial court recently unequivocally sided with the Department of Labor in its liability findings against the defendants in the Vinoskey ESOP case, but the court made adjustments to the DOL’s damages calculation that reduced the liability to the defendants considerably.
Trial court favors DOL in Vinoskey ESOP trial
In the closely watched Vinoskey ESOP litigation, the trial court recently issued a long decision that found all the defendants liable.
Expert comments on Vinoskey ESOP ruling
ESOP appraisers are questioning the technical aspects of the Vinoskey and Brundle rulings and asking what the recent rulings may mean for the future of employee ownership plans.
Strong win for DOL in Vinoskey ESOP trial
Difficult times for the ESOP community.
Lee v. Argent Trust Co.
Court dismisses private plaintiff’s ESOP suit, alleging defendant trustee and other ESOP and company actors violated their fiduciary duties to the plan and overpaid for company stock; a subsequent valuation showed the plan obtained stock at a discount, court concludes.
Court Finds Plaintiff Fails to Show ESOP Transaction Caused Injury
Court dismisses private plaintiff’s ESOP suit, alleging defendant trustee and other ESOP and company actors violated their fiduciary duties to the plan and overpaid for company stock; a subsequent valuation showed the plan obtained stock at a discount, court concludes.
DOL Prevails on All Claims Against ESOP Trustee and Owner/Seller
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.
Pizzella v. Vinoskey (I)
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.
Brundle v. Wilmington Trust N.A. (III)
In key ESOP case, 4th Circuit affirms liability and damages findings against ESOP trustee; court says trustee’s reliance on ESOP appraiser’s contemporaneous valuation was not “reasonably justified”; district court used correct measure of damages and justifiable methodology, 4th Circuit finds.
4th Circuit Says Record Supports Liability and Damages Findings Against ESOP Trustee
In key ESOP case, 4th Circuit affirms liability and damages findings against ESOP trustee; court says trustee’s reliance on ESOP appraiser’s contemporaneous valuation was not “reasonably justified”; district court used correct measure of damages and justifiable methodology, 4th Circuit finds.