Perez v. Bruister

The Secretary filed suit alleging that defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., when acting as trustees for an Employee Stock Ownership Plan (ESOP). In a three year period, BAI's owner Herbert C. Bruister sold 100% of his BAI shares to BAI's employees through a series of transactions. Two plan participants, Rader and Sealy, filed suit raising generally the same claims as the Secretary and seeking relief on behalf of the ESOP as a whole. The court concluded that Sealy has standing to sue on behalf of the ESOP; the district court applied the law correctly and did not clearly err in finding that Bruister was a fiduciary of the ESOP; defendants breached the duties of loyalty and prudence in their conduct with respect to the stock sales and engaged in prohibited transactions; the district court did not abuse its discretion by denying rescission of the BAI stock sales but granting equitable restitution in the amount the ESOP overpaid; the district court did not clearly err in holding BFLLC jointly and severally liable with the other defendants; the district court’s award and calculation of prejudgment interest were not an abuse of discretion; under the totality of circumstances, the district court did not abuse its discretion in barring defendants from serving as ERISA fiduciaries in the future; and, to alleviate any misconception and avert double recovery, the court modified the concurrent judgments in each consolidated case into a single judgment that disposes of them together. Accordingly, the court affirmed the judgment, but modified its concurrent judgments. View "Perez v. Bruister" on Justia Law