Fiduciary Lessons From DOL's Win In Employee Stock Case
By Gregory Brown, William Delany, Louis Joseph and Chelsea McCarthy (September 9, 2019, 3:46 PM EDT) -- In Acosta v. Vinoskey et al., the U.S. District Court for the Western District of Virginia recently awarded the Sentry Equipment Erectors Inc. employee stock ownership plan $6.5 million for the ESOP's overpayment for the founding shareholder's 52% interest in Sentry Equipment Erectors. The selling shareholders (Adam Vinoskey and a related trust) and the ESOP trustee were held jointly and severally liable.
The court held that the ESOP trustee had breached its duty of prudence and duty of loyalty to the ESOP and had committed a prohibited transaction by overpaying for the company stock held by Vinoskey and a related trust....
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