Caleb Barron and David Joffe Quoted in PLANSPONSOR on ESOPs Facing Scrutiny Over Cash Holdings

Bradley attorneys Caleb Barron and David Joffe were quoted in PLANSPONSOR on recent class action lawsuits filed over management of cash holdings in employee stock ownership plans (ESOPs), which may signal a new litigation trend.

While investments in company stock have been commonly scrutinized, the focus on cash holdings may be a “significant and novel shift,” according to Barron and Joffe.

Barron and Joffe, who are not involved in any of the ESOP cases, argued in a recent post that the option of moving individuals’ balances to the 401(k) plan is most useful when the accounts of terminated participants are segregated and immediate distributions are not permitted.

“While there are complex pros and cons to this approach, reducing the fiduciary obligations on the ESOP fiduciaries is a clear benefit,” they wrote.

The full article, “ESOPs Face Scrutiny Over Cash Holdings in Recent Lawsuits,” was published by PLANSPONSOR on March 31, 2025.