In November 2008 we discussed how the DOL Sued the Board of Directors for Alleged ERISA Violations and misusing ESOP assets. The DOL has announced that they have obtained consent judgments recovering more than $12 million for employee stock plan participants in California and Washington:
Last week we discussed Johnson v. Couturier, 2007 WL 3151802 (E.D. Cal. October 26, 2007) in Corporate Indemnification Limited to Amount Covered by Fiduciary Insurance? In a related case, the DOL announced that they have sued the board of directors for alleged ERISA violations:
In July we discussed Private Letter Ruling (PLR) 200827018, which made it easier to qualify for a IRC Section 1042 Tax Deferred Sale of Stock to an ESOP by including the holding period of a Predecessor LLC. IRS Rules That Holding Period in Shares of Company Stock Being Sold to an ESOP Should Include Holding Period in Company's Predecessor provides another perspective on the PLR:
We recently discussed the requirements for an IRC Section 1042 Tax Deferred Sale of Stock to an ESOP. One of the 4 requirements to qualify for Section 1042 sale, as provided under IRC Section 1042(b) - Sales of stock to employee stock ownership plans or certain cooperative Requirements to qualify for nonrecognition, is to provide a written statement:
We recently discussed the U.S. Sugar ESOP Issues. Florida to Buy U.S. Sugar's Land To Aid Everglades discusses how Florida is purchasing land from U.S. Sugar Corp. and leasing it back for the next six years before turning over the land for conservation purposes, effectively shutting down the company:
California Supreme Court's Decision on Domestic Partnerships May Raise Some Plan Document Issues discusses how last month's California Supreme Court Ruling (In re Marriage Cases, No. S147999 (May 15, 2008)) could create some plan document issues.
UPDATE 11/22/2008: New Offer to Purchase U.S. Sugar
UPDATE 8/6/2008: Detailed Look at Florida's Purchase of 187,000 Acres of U.S. Sugar Land provides a detailed look at Florida's Purchase of the 187,000 Acres of Land Owned by U.S. Sugar Corp., including a review of the outstanding U.S. Sugar ESOP litigation.
UPDATE 7/2/2008: More US Sugar ESOP
UPDATE 6/25/2008: U.S. Sugar ESOP Update: Florida Purchasing U.S. Sugar Land discusses how Florida is purchasing land from U.S. Sugar Corp. and leasing it back for the next six years before turning over the land for conservation purposes, effectively shutting down the company.
For purposes of our U.S. Sugar ESOP analysis, we will split the issues into ESOP perception issues and legal issues.
ESOP Perception Issues
Sugar workers say company cheated them on pensions was initially was posted Tuesday, May 27, 2008 on the International Herald Tribune, the global edition of the New York Times. On Wednesday the New York Times website posted an online article titled Sugar Workers, Given Shares Instead of Pension, Wonder Why Price Is So Low. Saving the most sensational headline for the print edition,
In Stock Plan, Employees See Stacked Deck appeared on the front page of the Thursday, May 29 edition of the New York Times.
Company President Pleads Guilty to Lying on Form 5500 and Employer Fined for Lying on Form 5500 discuss how a company president and fiduciary misused plan assets and was convicted of filing a false IRS Form 5500: