Practice Areas & Industries: Jones Day

Practice/Industry Group Overview

We advise many clients who sponsor qualified savings plans and ESOPs that hold substantial amounts of employer stock on the unique ERISA fiduciary duty issues raised by plan-owned employer stock, especially where participants' ability to diversify their accounts out of employer stock is limited. The potential for substantial fiduciary liability has always been present, and the high-profile corporate collapses of the late 1990s and early 2000s have increasingly drawn the attention of legislators, regulators, and private litigators to this issue.

Also important is planning for the handling of plan-owned stock in the context of an acquisition or a proxy contest. Our lawyers are experienced in balancing the desires of our clients with the views of the Department of Labor and developing case law in this sometimes contentious area.

Complementing our experience in ESOP matters is our representation of several institutional fiduciaries in novel and complex ESOP-based financings and acquisitions. Through these engagements, we stay ahead of the curve on sophisticated planning techniques and emerging trends regarding fiduciary duties and liabilities.

The qualified plan tax rules applicable to ESOPs are an additional focus. An important part of our ESOP representations involves planning to take advantage of the many tax incentives offered to ESOPs, including, recently, the liberalization of the Code Section 404 deduction for dividends paid on employer stock held in an ESOPs.

Contact(s)

Alan S. Miller
New York
Tel: 1.212.326.3939
Dallas
Tel: 1.214.220.3939