In an ERISA action challenging a stock purchase under an Employee Stock Ownership Plan (ESOP), the dismissal of the complaint is reversed where, when an ESOP incurs debt to finance a purchase of shares of stock and then later sells the shares in exchange for cancellation of some of that debt, the debt cancellation in the second transaction should not be construed as having reduced the purchase price paid in the first transaction.
Argued: October 21, 2008
Decided: June 19, 2009
Before: FEINBERG, WINTER, and POOLER, Circuit Judges.
Opinion by WINTER, Circuit Judge.
TERENCE J. DEVINE (Stanley H. Shayne, Shayne Nichols, LLC, Columbus, Ohio; Gary D. Greenwald, Keller Rohrback, PLC, Phoenix, Arizona, on the brief), DeGraff, Foy, Kunz & Devine, LLP, Albany, New York, for Plaintiffs-Appellants.
EDWARD A. SCALLET (Lars C. Golumbic and Dipal A. Shah, Groom Law Group Chartered, Washington, D.C.; Robert N. Eccles, Jonathan D. Hacker, and Schan S. Duff, O'Melveny & Myers, LLP, Washington, D.C., on the brief), Groom Law Group Chartered, Washington, D.C., for Defendant-Appellee.