Courts continue to decide stock drop cases while waiting for the Supreme Court to act

As we await the U.S. Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, the lower courts continue to apply the presumption of prudence (known as the Moench presumption) in stock drop cases.

Many courts apply a presumption that fiduciaries act prudently when the plan requires them to invest in company stock. Inconsistent with other appellate courts that have ruled on this issue, the Sixth Circuit Court of Appeals held in the Dudenhoeffer case that this presumption of prudence is not available at the pleading stage.

ERIC members and trial members can read more here.