Judge Allows ESOP Participants to Seek $40M From Entity Holding Buyout Proceeds

Employee stock ownership plan participants can seek more than $40 million from a family foundation that received proceeds from an ESOP buyout, the U.S. District Court for the Northern District of Illinois held (Fish v. Greatbanc Trust Co., 2015 BL 186767, N.D. Ill., 1:09-cv-01668, 6/12/15).

The court allowed participants in the Antioch Co. ESOP to seek a constructive trust over amounts held by the foundation, despite the foundation’s protests that these amounts weren’t ESOP plan assets—rather, they were amounts received by ESOP fiduciaries pursuant to a buyout transaction.

The court explained that this ruling wasn’t at odds ...