Originally appeared in Benefits & Compensation Bulletin, Volume IX, No. 1
Two MMWR attorneys, Jeanne Bakker and Ed Ellis, have won on summary judgement in an ERISA-based action brought by the U.S. Department of Labor ("DOL") against three retirement plan trustees and against Radnor Capital Management, Inc. and Pierce Archer. MMWR represents Radnor Capital Management and Pierce Archer. Judge Lancaster of the Western District of Pennsylvania rendered his opinion on February 14, 2001.
In 1993, the three plan trustees decided to merge the employer’s profit sharing plan ("PSP") into its employee stock ownership plan ("ESOP") and to use the PSP’s liquid assets to pay off the ESOP’s initial stock acquisition loan. When the employer subsequently went bankrupt and the ESOP was unable to pay benefits because it held nothing but worthless stock, the DOL alleged that the trustees had breached their ERISA fiduciary duties and engaged in prohibited transactions.
