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The “Prudent Person” Standard In Esop Breach Of Duty Of Care Claims, Zien Halwani
The “Prudent Person” Standard In Esop Breach Of Duty Of Care Claims, Zien Halwani
Bankruptcy Research Library
(Excerpt)
Employee stock ownership plans (ESOPs) are a form of statutory pension program designed to invest employee retirement assets in the stock of the employer. Under the Employment Retirement and Income Securities Act of 1974 (“ERISA”), ESOP fiduciaries must discharge their duties “with the care, skill, prudence and diligence under the circumstances prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” This is to say that under ERISA, ESOP fiduciaries are liable for breaches of duty of care, …