4th Circuit upholds Brundle ESOP valuation and damages findings
The 4th Circuit Court of Appeals just affirmed the district court’s ruling against the trustee in the intensely contested Brundle v. Wilmington Trust ESOP case, including the district court’s valuation and damages findings.
Post-trial briefs in Vinoskey ESOP trial point to fierce valuation fight
The DOL’s aggressive oversight strategy concerning ESOPs has led to a number of controversial lawsuits, including, most recently, the Acosta v. Vinoskey case, which, in the past few months, went to trial over the DOL's overpayment claim.
In ESOP Dispute, Court Orders Disclosure of Communications Involving Independent Financial Advisor
In ESOP discovery dispute, court orders disclosure of documents involving company’s independent financial advisor; there is no attorney-client privilege where parties’ engagement agreement expressly designated advisor as an “independent contractor with no fiduciary or agency to the Company.”
Acosta v. Wilmington Trust, N.A. (HCMC)
In ESOP discovery dispute, court orders disclosure of documents involving company’s independent financial advisor; there is no attorney-client privilege where parties’ engagement agreement expressly designated advisor as an “independent contractor with no fiduciary or agency to the Company.”
DOL urges court to uphold judgment against trustee in Brundle ESOP litigation
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.
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.
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.
Management projections take center stage in bankruptcy case
In a complex bankruptcy case involving players in the petrochemical industry, the court trained its eyes on the management projections underlying a merger that led to the formation of a company that went bankrupt only a year after the close of the transaction.
Tax Court’s Novel Theory Aims to Prevent ‘Double Inclusion’
Tax Court finds assets transferred into family limited partnership on behalf of incapacitated decedent shortly before death are includible in gross estate under IRC section 2036(a)(2); to avoid “double inclusion,” court states new rule limiting includible ...
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.
Tax Court’s Novel Theory Aims to Prevent ‘Double Inclusion’
Tax Court finds assets transferred into family limited partnership on behalf of incapacitated decedent shortly before death are includible in gross estate under IRC section 2036(a)(2); to avoid “double inclusion,” court states new rule limiting includible ...
Estate of Powell v. Commissioner
Tax Court finds assets transferred into family limited partnership on behalf of incapacitated decedent shortly before death are includible in gross estate under IRC section 2036(a)(2); to avoid “double inclusion,” court states new rule limiting includible ...
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.
In Unusual ESOP Case, 5th Circuit Validates FMV Computation
5th Circuit upholds district court’s liability and remedy findings in ESOP case; lower court’s weighting and averaging of valuation results offered by parties’ experts to compute amount of overpayment “was founded in established valuation methodology.”
5th Circuit backs district court's fair market value determination in ESOP dispute
The district court's determination of overpayment was a function of the contract price and the stock’s fair market value on each of three transaction dates. For its FMV determination, the court considered the testimony of three noted valuation experts retained by the plaintiffs, the DOL, and the defendants respectively. Different experts used different methods, different assumptions, different estimates, and they reached different conclusions. But they all used multiple approaches to produce several FMV estimates on the transaction dates. To arrive at a final value determination, or range of values, they all averaged or weighted the results.
Perez v. Bruister (II)
5th Circuit upholds district court’s liability and remedy findings in ESOP case; lower court’s weighting and averaging of valuation results offered by parties’ experts to compute amount of overpayment “was founded in established valuation methodology.”
Bankruptcy Court Accepts Rationale for Tax Affecting
In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
Averaging Multiple Appraisals Yields Most Reliable FMV
In ESOP case, court finds trustees unreasonably relied on appraiser’s valuations and overpaid for company stock; court credits parties’ three experts equally and arrives at fair market value by averaging results from experts’ multiple calculations.
Bank of America, N.A. v. Veluchamy (In re Veluchamy)
In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
Perez v. Bruister (I)
In ESOP case, court finds trustees unreasonably relied on appraiser’s valuations and overpaid for company stock; court credits parties’ three experts equally and arrives at fair market value by averaging results from experts’ multiple calculations.