Risk Management in an Evolving Litigation Environment

Risk management is crucial for employee-owned companies, including addressing the risk of DOL investigations and/or lawsuits relating to the ESOP. ESOP litigation, while often focused on stock purchase and sale transactions, has evolved to also challenge the releveraging and cash account management of mature ESOPs.

To manage these risks, it is necessary for companies to procure appropriate insurance. When investigations and lawsuits commence, insurance coverage issues often need to be addressed when a claim is made. Are you knowledgeable about and prepared to address the issues?

The focus of this session is to educate employee-owned companies (CEOs, COOs, general counsel, directors), trustees, and service providers about the risks of evolving ESOP litigation and to enable them to prepare for those risks before they arise.

This panel consists of an attorney who represents companies and trustees in DOL investigations and lawsuits, an insurance broker who assists companies to obtain appropriate policies, and an insurance coverage lawyer who works with companies and trustees to obtain all available insurance coverage when a claim is made. The panel will discuss real-world case studies to help attendees avoid pitfalls through good planning and preparation. Attendees will participate in practical exercises to better understand how to plan better for the future.

NCEO Publication: ESOP and 401(k) Plan Employer Stock Litigation Review 1990-2025