Noll Manufacturing Co.

Keller Rohrback L.L.P. has obtained a major victory for participants in Employee Stock Ownership Plans (commonly referred to as ESOPs). In Johnson v. Couturier Keller Rohrback alleged that corporate management of Noll Manufacturing Co. breached their ERISA fiduciary duties to participants in the ESOP, which owned all the stock in the company, by awarding themselves grossly excessive compensation at the expense of the ESOP.

On Monday, July 27, 2009, in a 33-page published opinion, the federal appellate court in San Francisco, California, upheld the trial court’s decisions to freeze the assets of Mr. Couturier, the former President of Noll Manufacturing, and to prohibit the use of company assets to pay defense costs, noting that it was “likely” that the plaintiffs would prevail on their claim for “tens of millions of dollars.”

In the course of its wide ranging opinion, the court addressed several issues of importance in ESOP litigation, including the extent to which a company may indemnify fiduciaries for fiduciary breach—ruling that the indemnification agreements in question violated ERISA—and the important distinction between business conduct and fiduciary conduct in an ESOP-owned company.

If you have questions regarding this litigation or have concerns regarding your company’s employee stock ownership plan, you may contact attorneys Gary Greenwald, Gary Gotto, or Lynn Sarko toll free at (800) 776-6044, or via e-mail at investor@kellerrohrback.com.

The ruling highlights Keller Rohrback’s growing private ESOP practice, which focuses on business practices and fiduciary conduct in ESOP-owned companies. Keller Rohrback is one of America’s leading law firms handling retirement plan litigation. We are committed to helping employees and retirees protect their retirement savings. Keller Rohrback has served as lead and co-lead counsel in numerous class action cases, including cases against Enron and WorldCom. Keller Rohrback has successfully provided class action representation for over a decade. Its trial lawyers have obtained judgments and settlements on behalf of clients in excess of seven billion dollars.