Morgan Lewis on ESOPs
April 2005

In this Issue:

• Recent Class-Action Cases Survive Motions to Dismiss, Address Standing Issues:
  On March 31, 2005, a New York district court issued an opinion in In re Polaroid ERISA Litigation, holding that participants in the Polaroid Corp. Section 401(k) plan can proceed in their suit against individual fiduciaries of the plan.
• IRS Issues Guidance on Taxability of Net Unrealized Appreciation in Certain Corporate Transactions Involving ESOPs:
  The Internal Revenue Service has issued two new private letter rulings, Private Letter Rulings 200509032 and 200507016, which provide additional guidance about the tax treatment of net unrealized appreciation in certain corporate transactions involving ESOPs.
• Calendar of Events
• Per Supreme Court, Employee-Owner Qualifies as Plan Participant Under ERISA:
  Retirement benefits held by qualified plans are generally protected from claims of creditors and third parties under both ERISA and the Code. With a few exceptions, under ERISA’s
  “anti-alienation” provisions, neither the creditors of the participants nor the creditors of the employer can access benefits or assets of a qualified plan.

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