Corporate Governance & Transactions

Fiduciary Responsibility

The Firm advises corporate boards and ERISA fiduciaries of the conduct expected of them as plan fiduciaries. It reviews Form 5500s and accompanying audit reports for appropriate disclosure. The Firm’s attorneys are experienced in obtaining prohibited transaction exemptions from the US Department of Labor. They work closely with consultants retained to assist fiduciaries concerning plan investments and cost structures and customize investment policy statements, if they are appropriate for a plan, so that they do not tie fiduciaries into a “one size fits all” pattern that makes them more (not less) vulnerable to litigation.

Engagements include:

  • Attendance at meetings of 401(k) plan fiduciaries of plan sponsors and appointed committees, including those of two NYSE-listed companies and a major hospital.
  • Preparation of investment policy statements for 401(k) and 403(b) plan fiduciaries, and revisions to draft statements when appropriate. Most recently, we have done this for two NYSE-listed corporations, a well-known college, a major hospital, and a number of closely held corporations.
  • Advise Boards and Committees of tax-exempt organizations of the process to follow to avoid IRC “intermediate sanctions” when negotiating executive contracts.
  • Advise CPA in DOL investigation of his auditing methodology for ERISA pension benefit plans.
  • Advise 401(k) and 403(b) plan sponsors of the US Department of Labor rules with respect to uniform disclosure requirements for plan investments.
  • Advise ESOP sponsor of three closely ESOPs and one ESOP of a NYSE-listed company throughout the entire process of purchasing stock, qualifying sellers for favorable tax treatment, stock allocations, and employee communication.
  • Obtained prohibited transaction from the US Department of Labor to allow shareholders of a closely-held company to purchase company stock from the IRA of their late father.
  • Obtaining prohibited transaction exemption from the US Department of Labor to allow a plan sponsor to purchase real estate from the assumed plan of an acquired company after determining this would be in the best interest of participants.

Corporate Transactions

The Firm has extraordinary experience in dealing with employee benefits and executive compensation during a transaction. Transactional attorneys understand that due diligence scrutiny exceeds what is found in a government audit. Simple “mistakes” may assume outsized importance as parties negotiate for price and terms, particularly where the nature and magnitude of liability flowing from a mistake is not clearly understood. The Firm’s clients with active acquisition programs look to the Firm in the due diligence process and transition of acquired employees to the buyer’s plans.

It is gratifying that accomplished attorneys seek out the Firm to assist with their client transactions. Chimento & Webb does not compete with them for the relationships, and focuses instead on what it does best: providing advice on employee benefits and executive compensation.

Engagements include:

  • Assistance to well-known client in its active acquisition program, including most recently that of a public company for $134 Million. Engagement included analysis of executive compensation, §280G calculations, §409A analysis, and transition of employees from a §401(k)-only program to a program that includes a defined benefit plan in addition to 401(k).
  • Currently working with NYSE-listed client on pending $85 million acquisition. Includes transition of employees to a new 401(k) plan.
  • Currently working with large tax-exempt employer considering strategic initiatives and need for executive retention plans.
  • Served as special benefits counsel, for §409A and §280G issues, to large Boston law firm in connection with a client acquisition.
  • Representation of companies prior to transactions, and establishment of protection and retention programs.
  • Recently assisted private company to purchase an entity with a large potential withdrawal liability to a multiemployer plan. We were referred by outside counsel due to our familiarity with multiemployer plans and the broad reach of withdrawal liability. A successful negotiation of settlement on that issue, including agreement with the local union to discontinue its requirement of multiemployer participation, made the acquisition affordable for the buyer, and saved union jobs