Please ensure Javascript is enabled for purposes of website accessibility

ERISA Violations – Employee Stock Plan

By: Derek Hawkins//August 30, 2016//

ERISA Violations – Employee Stock Plan

By: Derek Hawkins//August 30, 2016//

Listen to this article

7th Circuit Court of Appeals

Case Name: Lissa Allen et al v. GreatBanc Trust Co.,

Case No.: 15-2569

Officials: WOOD, Chief Judge, and FLAUM and WILLIAMS, Circuit Judges

Focus: ERISA Violations – Employee Stock Plan

Plaintiff properly alleged a prohibited transaction and a breach of fiduciary duty in their pleadings.

“The plaintiffs met this burden: they alleged that the stock value dropped dramatically after the sale (implying that the sale price was inflated), that the loan came from the employer‐ seller rather than from an outside entity (indicating that out‐ side funding was not available), and that the interest rate was uncommonly high (implying that the sale was risky, or that the shareholders executed the deal in order to siphon money from the Plan to themselves). These facts support an inference that GreatBanc breached its fiduciary duty, either by failing to conduct an adequate inquiry into the proper valuation of the shares or by intentionally facilitating an improper trans‐ action.”

Reversed and remanded

Full Text


Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

Polls

Should Wisconsin Supreme Court rules be amended so attorneys can't appeal license revocation after 5 years?

View Results

Loading ... Loading ...

Legal News

See All Legal News

WLJ People

Sea all WLJ People

Opinion Digests