In Lee v. Argent Trust Co., the court dismissed ERISA
claims challenging an ESOP stock transaction because the plaintiff,
who "fundamentally misunderstands the nature of the" ESOP
transaction, did not allege that she suffered any injury. This
decision is important to educate other courts about economics,
particularly in cases where plaintiffs rely on little more than the
post-transaction valuation as evidence of supposed
overvaluation.
In Depth
On August 7, 2019, a district court dismissed ERISA claims
against a trustee, sponsor company and individuals because the
complaint did not plead that the ESOP transaction was overvalued.
The claims related to the Choate Construction Company ESOP. Choate
is a privately held company that formed an ESOP in 2016. It
retained Argent as the plan's trustee, and Argent was
responsible for evaluating and overseeing the initial ESOP stock
purchase.
