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BUSINESS BANKING & CORPORATE COUNSEL FEATURE

financial statement adjustments, reliability of on corporate governance, corporate finance, reached at (614) 246-2152 or at tjochim@
historical financial data, material assumptions, ESOPs, M&A and employee benefits. walterhav.com.
treatment of corporate debt, methodologies, Publications include Employee Stock Ownership
the sponsor’s ability to service liabilities, and and Related Plans (Greenwood Press, 1982).
reasonably foreseeable risks of the transaction. He is rated band 2 by Chambers & Partners Mike Sorice is a law clerk in the Colum-
In making these conclusions, trustee USA and AV Preeminent by Martindale- bus, Ohio, office of Walter | Haverfield
personnel must read and understand Hubbell. He is also a Fellow of the American LLP and a third-year law student at
valuation reports, question underlying College of Employee Benefits Counsel. Tim the Ohio State University Moritz College
assumptions, and inquire into consistency serves as a member of the board of directors of Law. Mike can be reached at
of information and conclusions. The trustee of four ESOP-owned companies. Tim can be (614) 246-2262 or at msorice@walterhav.com.
must document personnel responsible for
reviewing valuation reports and record
and explain personnel disagreements. If
reasonableness, prudence, or consistency are
doubtful, trustees must reject the transaction.

Other Requirements
The agreements required that trustees
not cause ESOPs to engage in leveraged
stock purchase transactions where the
principal of the debt exceeds the fair market
value of acquired stock. The agreements
also required trustees to consider the
appropriateness of claw-back provisions.
Finally, the agreements required trustees to
preserve notes and documents, including
the full names and contact information
of each member of the trustee’s fiduciary
committee, all notes and records on the votes
of trustee committee members who voted
on the transaction, and all communications
between the trustee and its personnel and
the ESOP sponsor, non-ESOP parties, and
any of the sponsor’s advisors.
DOL crafted these agreements for broad As we inspire and build the next generation
application to achieve its goal of guidance of leaders, it is with great pride that we
through litigation. However, some provisions support associate, Tara Rose, as she joins
are narrowly tailored to particular situations. CMBA ’s 2019-2020 Leadership Academy.
For example, many provisions in Joyner
applied specifically to an individual acting Congratulations, Tara!
as an ESOP transaction trustee. Trustees and
their advisors should consult the settlement
agreements to determine applicability to
their unique situation.
1 Solis v. GreatBanc Trust Company et al, No. 5:1201648 (C.D. Cal.
2014).
2 Perez v. First Bankers Trust Servs. Inc., 1:1208646 (S.D.N.Y. 2017).
3 Perez v. BAT Masonry Co., Inc., No. 6:1500028 (W.D. Va. 2015).
4 Acosta v. Mueller, No. 2:1301302 (E.D. Wis. 2017)
bdblaw.com
Tim Jochim is a Partner in the
Columbus, Ohio, office of Walter
| Haverfield LLP and a national
authority on business succession
and employee stock ownership Proud to be part of Cleveland’s thriving legal community
plans (ESOPs). He is a trusted advisor to clients

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SEPTEMBER 2019 BDB CMBA Tara Rose 2019.indd 1 CLEVELAND METROPOLITAN BAR JOURNAL | 19