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ARTICLE · 16 SEPTEMBER 2020

Appellate Court Split In Recent Single Stock Fund Litigation

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The Fourth Circuit's recent split decision in Quatrone v. Gannett Co., Inc., No. 19-1212 (4th Cir. Aug. 11, 2020) is sure to raise the blood pressure of sponsors and administrators...

United StatesFinance and Banking
Maureen Gorman
Maureen Gorman
Richard Nowak
Richard Nowak
Stephanie B. Vasconcellos
Stephanie B. Vasconcellos
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The Fourth Circuit's recent split decision in Quatrone v. Gannett Co., Inc., No. 19-1212 (4th Cir. Aug. 11, 2020) is sure to raise the blood pressure of sponsors and administrators of retirement plans with single stock funds. Together with a recent Fifth Circuit decision in Schweitzer v. Inv. Comm. of Phillips 66 Sav. Plan, No. 18-cv-20379, 2020 WL 2611542 (5th Cir. May 22, 2020), the Gannett case highlights the dilemma of retirement plan sponsors and fiduciaries, who, as a result of a corporate transaction, inherit a plan investment fund consisting of a single class of stock that does not constitute an employer security for purposes of ERISA (i.e., a "single stock fund"). Plan fiduciaries in these circumstances have been targeted in class actions brought by an aggressive plaintiffs' bar both for liquidating a single stock fund too soon and for not liquidating a single stock fund soon enough. While courts are still evaluating how to handle these single stock fund

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