Carol Chesemore v. David Fenkell

SYKES, Circuit Judge.

Trachte Building Systems, Inc., a Wisconsin manufacturer, established an employee stock ownership plan (“ESOP”) in the mid-1980s when ESOPs were a popular employee-benefits instrument. In the late 1990s, David Fenkell and Alliance Holdings, Inc., a company he founded and controlled, developed a niche specialty in buying and selling ESOP-owned, closely held companies with limited marketability. In the typical transaction, Fenkell would merge the ESOP of an acquired company into Alliance’s own ESOP, hold the company for a few years with its management in place, and then…