Outside advisors alone won't cut it - the ruling shows what fiduciaries must do themselves
Hiring an expert doesn't get a plan fiduciary off the hook. A federal appeals court just laid out what actually does.
On July 17, 2026, the Seventh Circuit Court of Appeals affirmed a lower court's decision, ending a long-running fight over the 2016 sale of a printing company owned by its own workers - and handing benefits professionals a rare, detailed look at what a defensible plan sale looks like.
The company, a direct-mail printer in Wheeling, Illinois, was wholly owned by an employee stock ownership plan, or ESOP - a retirement plan that lets workers hold stock in the company they work for. In 2016, the board sold it to a private equity firm for $265 million.
Not everyone was happy. One plan shareholder, a former vice president of manufacturing, thought the company went too cheap. He sued the plan's trustee, GreatBanc Trust Company, and several board members under the Employee Retirement Income Security Act, or ERISA. He argued they had breached their duties by favoring financial buyers, returning to the eventual buyer after it cut its offer, and settling for less than the company was worth.
After a three-week trial, the district court sided with the defendants on every claim, in a case brought for a class of 400 to 500 shareholders. The appeals court found no clear error and affirmed.
Here's the part HR and benefits leaders should sit up for. The court said a trustee's discretionary decisions get deferential review only when no conflict of interest exists. And leaning on outside experts, on its own, isn't a shield. GreatBanc won because it went further - running what the court called a "careful and impartial investigation," pressing its own advisors on the deal's fairness rather than taking their word for it.
The court also tossed a self-dealing claim against the company's CEO, who reinvested equity in the post-sale business. Buyers routinely expect executives to keep skin in the game, the judges noted, and her payout climbed alongside the sale price.
On damages, the court refused to credit an expert's $19 million or $44 million loss estimate, because no actual buyer had ever offered more.
The lesson for anyone overseeing a plan: a good process beats good advice. Document your reasoning, question your experts, and show you reached your own judgment.
The ruling turned on the process and evidence behind the sale, and may still be subject to further review.
