Fiduciary Compliance in ESOP Transactions: Recent DOL Settlement Agreements and Best Practices for Counsel

Implications of Recent Settlement Agreements and Guidance on Avoiding Litigation

A live 90-minute premium CLE video webinar with interactive Q&A

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Thursday, October 6, 2022 (Today)

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

(Alert: Event date has changed from 8/4/2022!)

or call 1-800-926-7926
Course Materials

This CLE course will guide counsel on rules and procedures governing fiduciary and compliance responsibilities of trustees and advisers in ESOP transactions. The panel will discuss the implications of recent DOL settlement agreements, such as the Alpha, LNB, and the recent Reliance Trust agreement, as well as best practices in satisfying fiduciary duties in ESOP transactions and avoiding litigation.

Description

The DOL's ESOP enforcement project has continued its focus on valuation issues regarding ESOPs established by privately held companies. Most often, the DOL has focused on the reasonableness and reliability of valuations, which, if not undertaken correctly, can lead to the ESOP paying too much for shares of employer stock. The DOL's focus on valuation issues has resulted in several enforcement actions and settlement agreements that now serve as guidance to fiduciaries and counsel.

The settlement agreement with GreatBanc Trust Co. (the GBTC agreement) became an accepted guide for the due diligence process for ESOP transactions, providing trustees with guidelines and procedures to satisfy their fiduciary duties in ESOP transactions. Those procedures were expanded by the DOL's settlement agreements with First Bankers Trust Services Inc. (the FBTS agreement), Alpha Investment Consulting Group L.L.C (the Alpha agreement), and Lubbock National Bank (the LNB agreement), with continued ambiguity and uncertainties regarding ESOP transactions.

The most pertinent elements of these settlement agreements focus on the selection of valuation advisers, oversight of appraisers, financial statements, and document preservation, as well as the fiduciary review process. Counsel must recognize the differences and additions of each settlement agreement to understand the DOL's perspective on the duties of ESOP trustees and advisers in such transactions.

Listen as our panel provides guidance to counsel on rules and procedures governing fiduciary and compliance responsibilities of trustees and advisers in ESOP transactions, the implications of recent DOL settlement agreements, and best practices in satisfying fiduciary duties in ESOP transactions and avoiding litigation.

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Outline

  1. Overview of fiduciary duties, policies, and procedures of ESOP transactions
  2. The impact of DOL settlement agreements
  3. Detailed requirements of selecting valuation advisers and oversight of appraisers
  4. Fiduciary review process: projections, documentation, and reliance

Benefits

The panel will review these and other crucial issues:

  • Recognizing DOL standards for fiduciaries in ESOP transactions
  • Understanding the necessary policies and procedures to be followed by trustees or other fiduciaries of ESOPs
  • Selecting a valuation adviser and recognizing the requirements and procedures the adviser must follow
  • Proper documentation of valuation reports and transaction agreements
  • Critical steps during the fiduciary review process and avoiding litigation

Faculty

Burriss, Eliot
Eliot T. (Eli) Burriss

Partner
Katten Muchin Rosenman

Mr. Burriss represents clients in sophisticated litigation matters, with a scope that includes derivative actions,...  |  Read More

Rickard, Emily
Emily Rickard

Attorney
Morgan, Lewis & Bockius

Ms.Rickard focuses her practice on the Employee Retirement Income Security Act of 1974 (ERISA) and has devoted a...  |  Read More

Watson, Roberta
Roberta Casper Watson

Partner
The Wagner Law Group

Ms. Watson focuses on ERISA and employee benefits. She concentrates on a wide array of areas including, pension and...  |  Read More

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