Herman v. South Carolina National Bank

HULL, Circuit Judge:

These three consolidated cases concern an ERISA trustee’s paying $80 million from the assets of an employee stock ownership plan to purchase allegedly worthless stock from a closely held corporation’s owner, his relatives, and related entities. Claiming ERISA expressly prohibits this stock purchase, the Secretary of Labor appeals the district court’s grant of summary judgment to the plan’s trustee and the stock sellers. 1 After review, we reverse.

I. FACTUAL BACKGROUND

A. The Stock Purchase

In 1990, South Carolina National Bank (“SCNB”) was the trustee of the Charter Medical…