Delta Airlines Wins Stock-Drop Lawsuit

In a May 8 decision, the 11th Circuit Court of Appeals dismissed the claim by lead plaintiff Dennis Smith that the trustee of Delta's ESOP should have sold company stock because the trustee should have known that the company's efforts to turn around its value would fail. The court agreed the circumstances were dire, noting, for example, Delta's 2006 request to void 93 million stock options held by 70,000 employees. Observing, however, that the plan required the trust to offer company stock, the court relied on its own ruling in Lanfear v. Home Depot to conclude "Because a reasonable fiduciary could have concluded that investments in Delta stock during the class period remained appropriate, Smith's prudence claim fails."