On July 17, 2026, the United States Court of Appeals for the Seventh Circuit issued a decision of considerable importance to sponsors, trustees, and boards of employee stock ownership plans. In Rush v. GreatBanc Trust Co., the court affirmed judgment for GreatBanc Trust and the Segerdahl Corporation board, upholding the fiduciaries' conduct in connection with the 2016 sale of sg360┬░ to a private equity buyer. In doing so, the Seventh Circuit reinforced a deferential framework for evaluating trustee decision-making in ESOP-owned company sale transactions under ERISA.
Central to the ruling was the standard of review. The court held that where an ESOP plan document grants the trustee sole and absolute discretion, and where no disqualifying conflict of interest has been established, the trustee's discretionary decisions are reviewed for abuse of discretion rather than de novo. This distinction is significant. Abuse-of-discretion review affords fiduciaries meaningful latitude to exercise judgment on complex questions of valuation, deal structure, and negotiation strategy, without having their choices second-guessed in hindsight by a reviewing court applying a fresh, independent analysis.
Applying that deferential standard, the Seventh Circuit rejected all five theories of ERISA fiduciary breach advanced by the plaintiffs. The comprehensive nature of the ruling is notable: rather than resolving the appeal on a single dispositive point, the court methodically addressed each asserted breach and found none sufficient to disturb the trustee's decisions or the board's related conduct. The result is a decision with substantial precedential value for ESOP fiduciaries defending sale-transaction litigation, particularly within the Seventh Circuit.
For trustees, corporate boards, and plan sponsors, the decision underscores the importance of well-drafted plan documents that clearly vest discretionary authority in the trustee, along with careful attention to conflict-of-interest issues throughout a transaction. It also highlights the value of a well-documented process demonstrating deliberation, independent advice, and reasoned judgment. Properly structured, these elements can enhance the protection available under a deferential standard of review when a sale transaction is later challenged.
This article is provided for general informational purposes only. Clients considering an ESOP transaction or facing related litigation should seek tailored legal advice suited to their specific circumstances.