Chris Wingard, an Associate in Kleinbard’s Business & Finance Practice, authored a post on the class action settlement in Davis v. United Bank Corporation Retirement Plan Committee for the National Center for Employee Ownership (NCEO)’s Employee Ownership Legal Digest. The NCEO’s Legal Digest provides summaries of key cases, rulings, and legal developments impacting employee ownership. As outlined in the tentative settlement, United Bank Corporation will pay $2 million to resolve a class action lawsuit brought by former employees claiming ERISA violations related to the forced liquidation of ESOP shares into cash at an allegedly improper price. The plaintiffs claimed that United Bank exchanged stock held in former employees’ ESOP accounts for cash at a price that was lower than the stock’s true market value. The case is significant because it emphasizes the importance of ESOP fiduciary obligations regarding stock valuation and highlights the potential risks of forcing former employees accounts to be invested in cash.
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