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Fifth Third Bancorp v. Dudenhoeffer

Articles Discussing Case:

U.S. Supreme Court Clarifies the Scope of ERISA Fiduciary Obligations in Recent Stock Drop Decision February 2, 2016

Franczek Radelet P.C • February 02, 2016
In recent years, plaintiffs’ lawyers have brought numerous ERISA breach of fiduciary duty lawsuits against employers that offer employer stock funds in their 401(k) plans. These lawsuits are typically brought on behalf of plan participants who have lost money because the value of the company’s stock has dropped. For many years, plaintiffs faced uphill battles in these so-called “stock drop” suits as most federal appellate courts adopted a “presumption of prudence” that favored plan fiduciaries’ decisions with respect to the continued inclusion of company stock in 401(k) plans. In 2014, in Fifth Third Bancorp v. Dudenhoeffer, the U.S. Supreme Court weighed in on this issue and eliminated this presumption of prudence.