The R.J. Reynolds defendants have again prevailed against allegations that they breached their fiduciary duties by divesting the RJR 401(k) plan of funds invested in Nabisco stock. Following remand by the Fourth Circuit, the district court held that a hypothetical fiduciary “would” have divested the plan of the Nabisco investments in the same time and
Employer Stock Fund
Supreme Court Denies Review of Fourth Circuit Loss Causation Case
The U.S. Supreme Court recently declined to grant certiorari to review the Fourth Circuit’s decision in RJR Pension Investment, et al. v. Tatum, 761 F.3d 363 (4th Cir. 2014). As we previously reported here, a divided panel of the Fourth Circuit held that, because the plaintiff proved that the plan fiduciaries acted imprudently…
Courts Continue to Apply Presumption of Prudence While Awaiting the USSC’s Views
As the employee benefits world awaits the U.S. Supreme Court’s decision in Dudenhoeffer v. Fifth Third Bancorp, two federal courts recently dismissed employer stock-drop cases brought under ERISA on the ground that plaintiffs failed to overcome the presumption that a fiduciary’s decision to remain invested in employer stock was prudent. See Smith v. Delta…
District Court in Tenth Circuit Adopts Presumption of Prudence
A district court in the Tenth Circuit adopted the presumption of prudence in dismissing a class action alleging that the defendants violated their fiduciary duties by allowing participants to continue investing in company stock at a time when the employer was allegedly experiencing significant financial difficulties. In re Chesapeake Energy Corp. 2012 ERISA Class Litig.…