An Oregon federal magistrate judge granted director defendants?ÇÖ motion to dismiss a shareholders?ÇÖ derivative action claiming that the board breached its fiduciary duty of loyalty to the shareholders and harmed the company by raising executive compensation in 2010, despite negative shareholder returns. The court held that the shareholders?ÇÖ claims did not override the presumption that, in making decisions regarding executive compensation, the board, in exercising its business judgment, acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company. Plumbers Local No. 137 Pension Fund v. Davis, No. 03:11-633-AC (D. Ore. Jan. 11, 2012).
The Department of Labor recently announced that the 2011 Form M-1 annual report for multiple employer welfare arrangements (MEWAs) is now available for filing. The 2011 Form M-1 is generally the same as the 2010 version, but with some minor changes for laws that became effective in 2011. The 2011 Form M-1 is due March 1, 2012, with an available extension until May 1, 2012. In addition, the DOL recently announced significant proposed changes to the Form M-1. Most notably, the proposed Form M-1 incorporates changes imposed by the Patient Protection and Affordable Care Act, which requires MEWAs to register with the DOL and file at least 30 days prior to operating in a state or expanding their operations in an additional state, and within 30 days of a merger, material change or a participant contribution increase of 50 percent or more. The proposed Form M-1 also requires the provision… Continue Reading