govinfo:USCOURTS-azd-2_19-cv-03178-6

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
WO 
 
 
 
 
IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF ARIZONA 
 
 
Julie A Su, 
 
Plaintiff, 
 
v. 
 
Eric Bensen, et al., 
 
Defendants. 
No. CV-19-03178-PHX-ROS 
 
ORDER 
 
 
 
 Plaintiff Julie A. Su, the Acting Secretary of Labor, brought this suit against 
Defendants Randall Smalley, Robert Smalley, Jr., and Eric Bensen . According to the 
Secretary, Defendants violated ERISA through their actions and inactions in connection 
with the establishment of an Employee Stock Ownership Plan. In January and February 
2024, the Court held a sixteen-day bench trial. The following are the Court’s Findings of 
Fact and Conclusions of Law. 
I. Background and Transaction Negotiations 
There are few disputes regarding the events leading up to creation of the ESOP. 
Their disagreements are whether Defendants acts and behavior violated their obligations 
required by ERISA. In particular whether Defendants failed to monitor another fiduciar y 
to ensure it did not violate its fiduciary duties; whether defendants knowingly participated 
in the trustees breaches; and whether Defendants participated in prohibited transactions. 
In 1971, Randall Smalley (“Randall”), Robert Smalley, Jr., (“Robert”), and their 
father formed American Land Cruisers, a company that rented recreational vehicles to the 

 
- 2 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
public. At the beginning both Randall and Robert were vice presidents. That company 
was later known as Cruise America, Inc., but is now known as RVR. RVR does business 
as “Cruise America” and RVR’s wholly owned subsidiaries are Cruise America, Inc., and 
Cruise Canada, Inc. For the sake of simplicity, the relevant company will be referred to as 
“RVR” throughout this Order. 
 Randall has an undergraduate degree in business administration from Stetson 
University. Robert has an undergraduate degree in political science from St. Leo College. 
Bensen has an undergraduate degree in business administration from the University of 
Miami, as well as a master’s degree in accounting. Bensen was first licensed as a Certified 
Public Accountant in 1980 and from 1979 to 1984 he worked at a private accounting firm. 
In that role, Bensen audited RVR. In 1984, Bensen began his employment with RVR as 
Vice President of Finance. 
 In 1984, RVR went public. The Smalleys and Bensen (together “Defendants”) were 
involved in the initial public offering. As a result of going public, the Smalleys went from 
majority owners to owning approximately 30% of the RVR stock. (Doc. 406 at 49). In 
1998, the Budget Group purchased all the RVR stock. Randall testified as part of the sale 
of RVR to Budget when Budget made the offer “there was a premium” and “Budget paid 
a premium.” (Doc. 408 at 98-99). In connection with the purchase, Defendants executed 
employment agreements with Budget allowing Defendants to continu e to run RVR’s 
business. (Doc. 408 at 149). Budget’s purchase of RVR was not successful. According 
to Randall, there were “culture problems” and “while the synergies look great on paper, 
[RVR] couldn’t get anybody at Budget to cooperate.” (Doc. 408 at 145). Consequently in 
2000, the Smalleys bought RVR back from Budget. (Doc. 408 at 145). After, the Smalleys 
each owned 50% of the RVR stock and were the sole directors of RVR. (Doc. 408 at 150). 
Once the Smalleys owned RVR again, Defendants executed employments agreements they 
had signed with Budget allowing them to continue to run the business. (Doc. 408 at 149). 
 From January 2001 to May 28, 2014, Randall was the CEO of RVR, Robert was the 
President and Chief Operating Officer , and the two of them were the only members of 

 
- 3 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
RVR’s Board of Directors. In 2011, Bensen with approval of the Smalleys acquired 3.3% 
of RVR’s stock. (Doc. 298 at 10). Also in 2011, Randall transferred his RVR stock into a 
trust that includes three sub -trusts. (Doc. 298 at 11). Randall is a settlor of the various 
trusts. As of 2013, Randall’s trusts owned 48.35% of RVR’s stock, Robert owned 48.35% 
of RVR’s stock, and Bensen owned 3.3% of RVR’s stock. (Doc. 298 at 11). From January 
2013 to May 28, 2014, Bensen was the Chief Financial Officer of RV R, who agreed he 
was “intimately familiar with RVR’s financial statements,” prepared these statements, and 
reviewed them. (Doc. 406 at 51). He was responsible for conducting audits of RVR , 
dealing with RVR’s banks and banking relationships. And he testified “as the CFO” he 
was very “involved in the sale of RVR stock to the ESOP.” (Doc. 406 at 52). In fact , he 
said that “every time (Bensen) got off a call with Chartwell, ( Bensen) would update the 
Smalleys.” Communication was convenient because their “offices are right next to each 
other.” Bensen and the Smalleys talked “every day about what’s going on.” “If there was 
anything . . . significant, (Defendants) would be talking about it.” (Doc. 406 at 51-52). 
 Sometime in 2013, Defendants began considering succession planning. Defendants 
did not want RVR to go public because legal requirements allegedly “made it too expensive 
for a company of [RVR’s] size to be public.” (Doc. 408 at 161). Defendants claimed they 
were looking for a way to “transition [RVR] over to [its] employees and reward the 
employees that made the company worth what it was.” (Doc. 408 at 162). Bensen spoke 
with individuals at Wells Fargo, RVR’s long -time corporate bank, about succession 
planning. Wells Fargo, along with RVR’s counsel from the law firm of Greenberg Traurig, 
LLP, recommended Defendants meet with financial advisors at the consulting firm 
Chartwell to discuss establishing an Employee Stock Ownership Plan or ESOP. (Doc. 407 
at 106-07, 150). 
 Chartwell was a financial consulting and valuation firm that provided services to 
privately held businesses including creating ESOPs . Four of Chartwell’s employees 
eventually worked on the RVR transaction : Greg Fresh , a managing director ; Edward 
“Ted” Margarit, a vice president; Stephanie Geerdes, an analyst; and Lindsey Gullickson, 

 
- 4 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
Fresh’s executive assistant. Fresh was responsible for managing staff at Chartwell 
including Margarit, Geerdes, and Gullickson. (Doc. 438 at 15). 
 As of early January 2014, in preparation for a meeting, Defendants gathered 
financial documents regarding RVR’s operations . Bensen sent Wells Fargo RVR’s 10 -
year financial projections which included consolidated balance sheets, statements of 
operations, stockholders’ equity, and cash flows. (Doc. 406 at 58 ; PX 163). Bensen had 
reviewed all the information before sending it to Wells Fargo. (Doc. 406 at 58). The 
documents included a “Notes Payable” amount for December 31, 2013 , of $47 million. 
(Doc. 406 at 59). “[M]ost of the 47 million” was RVR’s line of credit that RVR used to 
purchase the RVs it rented to the public. (Doc. 406 at 60). 
 On January 13 and 15, 2014, Fresh and Geerdes from Chartwell, Bensen, and 
representatives from Wells Fargo engaged in calls to discuss RVR’s “projections and 
valuations.” (Doc. 438 at 21-24). During those calls the participants discussed different 
methods for valuing RVR, such as the Discounted Cash Flow method, the Guideline 
Company method, and the Mergers and Acquisitions method. (Doc. 438 at 25 -26). They 
also discussed the equity value of RVR being $100 million and the notes reflect that Bensen 
responded “a big number with a lot of debt.” (Doc. 438 at 26-27; Doc. 406 at 63). 
 On January 27, 2014, Defendants had an in-person meeting with Fresh and Margarit 
from Chartwell, as well as an individual from Wells Fargo. (Doc. 408 at 100). Defendants 
were told Chartwell claimed “our professionals have comprehensive experience in ESOP-
related engagements having represented both shareholders and trustees.” And that “its 
professionals are nationally recognized market leaders with significant experience advising 
on a variety of ESO P-related projects and transactions.” (Doc. 406 at 67). Finally , 
Chartwell emphasized the advantages of hiring Chartwell was “the ESOP transaction 
process offers superior timing . . ., certainty of close, ease in negotiating terms.” (Doc. 406 
at 67). A lso Chartwell gave a written presentation discussing how an ESOP transaction 
would be structured and the benefits of establishing an ESOP. Defendants were told one 
major benefit for establishing an ESOP is the ability for the sellers of the stock to reduce 

 
- 5 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
or eliminate their capital gains taxes that would otherwise be due upon the sale of the ir 
stock. (JX 060.025). Another benefit explicitly made clear in the presentation was that 
establishing an ESOP allowed “[s]elling shareholders [to] maintain control of the Company 
and the Board of Directors.” (Doc. 406 at 68 ; JX 060.026). The presentation went on to 
state “[e]mployees are not granted operating or strategic control.” (Doc. 406 at 68). 
Bensen agreed the presentation stressed the ESOP could not pay more than “Fair 
Market Value” for the stock . (Doc. 406 at 72). Chartwell’s explanation of “ Fair Market 
Value” was the “price at which an asset would change hands . . . between a willing buyer 
and willing seller,” when both parties were well informed about the asset. (JX 060.028). 
There was no explanation in the presentation, or at trial, why Chartwell represented the 
advantages of an ESOP included “superior timing ,” “certainty of close ,” and “ease in 
negotiating terms” if Chartwell believed Fair Market Value was required. In other words, 
Chartwell’s promise of “superior timing ”, “certainty of close” and “ease in negotiating 
terms” only makes sense in light of the evidence that Chartwell knew and made clear to 
Defendants it could manipulate the transaction’s terms to whatever way Defendants 
desired. 
The presentation explained to Defendants a “minority interest value” would be 
different than a “controlling interest value.” (Doc. 406 at 68 ; JX 060.028 ). The 
presentation also explained that control value included a control premium that increased 
value. Bensen denied that a control premium was ever “brought up” or “calculated.” (Doc. 
406 at 70). The presentation provided an overview of the various approaches to valuation, 
such as the Discounted Cash Flow method and Guideline Company method. (JX 060.034). 
But Chartwell told Defendants “there were no public ly traded companies that were truly 
comparable to [RVR].” (JX 060.034). Thus, Chartwell decided to b ase its valuation 
“primarily” on the Discounted Cash Flow method. (JX 060.038). 
The presentation identified a “preliminary pro forma valuation” for a “control equity 
value” of $105,950,000. (Doc. 406 at 77). A 5% discount for lack of marketability was 
also appropriate. Thus, the preliminary “fair market value of RVR’s equity” was $100.7 

 
- 6 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
million. (Doc. 406 at 78; JX 060.038). That valuation did not include an explicit “control 
premium” and that a “control premium” applies, which is a central issue in this case. 
The parties have different understandings of what the phrase “control premium” 
means and when it is appropriate to apply. It is undisputed the term “control premium” 
refers to an increase in the value of the stock. (Doc. 406 at 144; 408 at 112). Defendants 
contend it is appropriate to apply a “control premium” whenever a buyer is purchasing 
100% of a company’s stock , even if the buyer will not have operational control over the 
company. The Secretary believes the term “control premium” refers to the buyer gaining 
the ability to control the company. Thus, the Secretary argues it is inappropriate to apply 
a “control premium” when the purchaser of 100% of the stock gains no control or only a 
limited amount of control based on the limitations imposed on the purchaser’s authority to 
control. The Secretary ’s position is correct. It is doubtful that valuation professionals 
would apply a “control premium” when a purchaser ostensibly owns 100% of the stock but 
has no ability to exercise any control over the company. Thus, while the January 27 
presentation did not include an explicit “control premium,” the presentation did indicate 
Chartwell was assuming a “control equity value.” Because Defendants knew they would 
never agree to give up any amount of control, th e presentation certainly alerted them that 
Chartwell’s valuation was too high. 
 On February 5, 2014, Bensen participated in a telephone call with Char twell and 
Wells Fargo to discuss a different written presentation prepared by Chartwell and the notes 
of the meeting show Bensen said the Smalleys “want to push forward.” That presentation 
explained Chartwell would represent RVR and its shareholders “in negotiation opposite 
that of the ESOP Trustee.” (JX 061.005). The presentation provided “recommended 
partners” to work on the other side of the transaction that would represent the ESOP . 
Chartwell recommended Reliance Trust Company as the ESOP Trustee, Stout Risius Ross, 
as the ESOP’s financial advisor, and the law firm of McDermott, Will & Emery as the 
ESOP’s legal counsel. (JX 061.012). While recommending appointment of professionals 
on the opposite side of the transaction, Chartwell represented its “role” would be “to 

 
- 7 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
quarterback the process on both sides of the deal and ensure that the selling shareholders’ 
interests, desired outcomes and timing are achieved.” (JX 061.005). This representation 
made clear to Defendants that Chartwell did not view the negotiation process as a truly 
arms-length negotiation as required by ERISA . Rather, Chartwell viewed itself , and 
informed Defendants, as in charge of both sides of the negotiations with the power and 
intent to “ensure” primarily Defendants “interests, desired outcomes an d timing” were 
achieved. 
 Based on the preliminary discussions and presentations, Defendants decided to 
pursue selling their stock to an ESOP. According to Bensen, by February 18, 2024, 
Defendants had retained Chartwell to work on the ESOP. Defendants had also retained the 
law firm Greenberg Traurig, Wells Fargo Advisors, and Wells Fargo Bank. (Doc. 407 at 
152). For reasons not explained at trial, Defendants did not execute an engagement letter 
with Chartwell until February 27, 2014. (Doc. 406 at 98-99). 
Throughout the entire process of negotiating and forming the ESOP, Bensen as the 
CFO acted as the primary point of contact between Chartwell and Defendants. During 
February and March 2014, Chartwell and Bensen had multiple phone calls to discuss the 
terms Defendants would accept for the sale of their stock to an ESOP. One of the meetings 
was held on February 18, when Chartwell presented Project Byway Organizational Kickoff 
meeting where Defendants were expressly informed “ESOP transactions are regulated b y 
IRS and DOL which do not allow the ESOP to transact at a value greater than the fair 
market value, and require the ESOP to receive adequate consideration.” (Doc. 406 at 97) 
But Bensen was asked at trial about the documents that referenced ERISA and whether he 
knew what they meant, and he said “only generally. I’m not a lawyer.” (Doc. 407 at 52). 
Chartwell planned to make a nother formal presentation to Defendants at a meeting on 
March 26, 2014. On March 24 in an email to Bensen , Margarit warranted “not much has 
changed, but what is there has been confirmed now through more intensive diligence and 
modeling, both on the transactional side, as well as the financing side.” (Doc. 406 at 124). 
There was no explanation of what was the intensive diligence and modeling. 

 
- 8 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
In preparing for the March 26 meeting, Chartwell sent a draft presentation to 
Bensen. When asked if there was anything else he would like to see in the presentation, 
Bensen responded “I think everyone has already seen most of this” but “[t]he boys [the 
Smalleys] will want to hear more on what they get . . . cash, interest, warrants, sars, 
principal payments.” The evidence , including conversations with and messages from 
Defendants, shows their concern was their financial welfare . They never discussed with 
Chartwell/Reliance the fiduciary duties required of them . Elaborating on what the boys 
wanted to hear, Bensen said: “[W]ell at this point this is March was still investigat ing the 
whole process of the ESOP . . . They’re going to sell the company and what do they get.” 
He added “I was concerned as well, because the interest – if there was going to be a high 
interest rate, that would be concerning to me as the CFO, because the company has to pay 
it.” (Doc 407 at 47). He emphasized “as a selling shareholder, I’d like to get a lot of money. 
It wasn’t a big amount for me after taxes and stuff, but I’m not going to turn it down.” and 
“I’m going to be here for 10 or 15 years beyond this, I want to know is the company going 
to be able to pay for all this?” He concluded, “[t]hat was number one important to me.” 
(Doc 407 at 48-49). Finally, a feature that dominated the decision to create the plan was 
that, “as with a 100 percent ESOP you can elect to be taxed as an S corporation.” (Doc. 
407 at 51). 
At the March 26, 2014, meeting, Chartwell gave a formal presentation to Defendants 
regarding the precise terms of the ESOP transaction. The purpose was to obtain 
Defendants’ approval to proceed with creating an ESOP. The presentation stated , in 
Chartwell’s view, RVR’s equity had a “controlling interest equity value” of $100.7 million. 
(JX 070.013). Again, it was important that the presentation specifically identified 
“controlling interest equity value” to understand Defendants’ later failures to question the 
final purchase price. And Bensen said it’s possible the “ control premium increases the 
value of the stock.” (Doc. 406 at 114) Again, Defendants made clear they would not give 
up control and knew a “controlling interest equity value” would be too high for what the 
ESOP would actually purchase. Again at the meeting, Bensen acknowledged the 

 
- 9 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
presentation emphasized “a key transaction objective was to: Provide liquidity to the 
selling shareholders to allow them to elect 1042 and defer capital gains taxes.” (Doc. 406 
at 129) 
The March 26 presentation again provided an overview of different methods of 
valuing the RVR equity, such as the Discounted Cash Flow method and the Guideline 
Company method. The presentation proposed a very short timeline for the entire ESOP 
transaction to take place. That timeline was: 
• April 4, 2014, to formally engage the ESOP trustee; 
• April 14, 2014, to upload due diligence information to data room for ESOP trustee 
and begin answering due diligence questions; 
• April 16, 2014 , to present [RVR], proposed equity valuation, and transaction 
structure, terms, and conditions to the ESOP trustee; 
• April 30, 2014 , for the ESOP trustee to counteroffer on the price, terms, and 
conditions; 
• May 7, 2014 , to finalize negotiations on price, terms, and conditions with ESOP 
trustee; 
• May 16, 2014, to finalize all legal documentation; and 
• May 27, 2014, closing and funding of the transaction. 
(JX 070.027). The ESOP trustee would be retained, and the timeline of the transaction 
would close approximately only 53 days later. There would be only 41 days between when 
the ESOP trustee first received the proposed transaction terms and the closing of the 
transaction. Bensen admitted there was only “a total of three weeks from the ask to finalize 
negotiations on price terms and conditions.” (Doc. 406 at 140). The abbreviated timeline 
was necessary solely because of Defendants’ desire to defer capita l gains taxes. For 
complicated tax reasons, Defendants could defer capital gains taxes on the sale of their 
stock only if the transaction closed by May 31, 2014. And this narrow timeline was only 
to ensure Defendants could enjoy the tax benefit. Perhaps realizing the abbreviated 
timeline was suspicious, at trial Defendants offered a different but unconvincing 

 
- 10 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
explanation. 
 According to Defendants at trial , the abbreviated timeline was necessary for the 
ESOP to reap the benefits of RVR’s busy summer season. (Doc. 408 at 204-05). In other 
words, the ESOP transaction needed to close quickly so the ESOP would own the RVR 
equity during the summer when RVR’s income is at the highest. This explanation is neither 
credible nor rational. As the Secretary identifies, RVR’s “summer profits were already 
captured in the annual projections used” to determine the value of Defendants’ stock. (Doc. 
487 at 17). See also Usenko v. MEMC LLC , 926 F.3d 468, 473 (8th Cir. 2019) (“ [A] 
security’s price in an efficient market reflects all publicly available information and 
represents the market’s best estimate of its value in light of its riskiness and the future net 
income flows that those holding it are likely to receive.”). Thus, ensuring the transaction 
occurred before the summer profits provided no additional benefit to the ESOP , of which 
Bensen, a capable, experienced accountant was fully aware. 
 Having decided to proceed with establishing an ESOP, the first step was to hire an 
independent trustee as Chartwell and Wells Fargo recommended. (Doc. 407 at 153). 
Chartwell and Greenberg identified three possible companies to act as trustee: Alerus 
Financial, Reliance Trust, and GreatBanc Trust. Defendants claim they seriously 
considered each company. Defendants, a representative of Chartwell, and individuals from 
Greenberg interviewed the three trustee candidates and based on those interviews, 
Defendants selected Reliance to serve as trustee. Based on information provided by 
Chartwell and others, Defendants were made aware the Department of Labor might 
scrutinize the ESOP and Defendants knew ERISA was the primary law regulating ESOPS. 
A major reason Defendants claimed they selected Reliance was that, as of 2014, Reliance 
had never been sued by the Department of Labor. Thus, Defendants were well aware that 
forming ESOPs required compliance with complicated ERISA laws that are enforced by 
the Department of Labor. 
 Defendants claim the trustee selection process and interviews were not merely pro 
forma actions which lead to the formal retention of Reliance . Bensen admitted he never 

 
- 11 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
asked Reliance or Chartwell about their “past business relationships” or their “ongoing 
business relationships.” (Doc. 406 at 159) Bensen was on a call on March 12 where the 
Trustee candidates were discussed with Chartwell . Andy Gibson , of BDO, was 
Defendants’ advisor regarding the Trustee candidates. It was mentioned that an additional 
candidate needed to be “put in the mix.” The reason as Greg Fresh had “talked to him 
earlier” and Andy Gibson assured everyone “this guy won’t balk at what we want.” (Doc. 
406 at 149-51; Doc. 408 at 78-80) On April 16, 2014, Bensen signed the engagement letter 
with Reliance, however, the record establishes Reliance had been selected months earlier. 
As already mentioned, a Chartwell presentation to Defendants in February 2014 indicated 
Chartwell recommended Defendants hire Reliance as the ESOP trustee. (Doc. 406 at 93). 
And six weeks before Reliance was engaged, on February 25, 2014, Margarit of Chartwell 
sent an email to Martin of Reliance stating “I hear we’ll be working together in Phoenix 
this spring.” This email referenced the two companies working together on the RVR 
transaction. Defendants argue this email might have been referencing some work other 
than the RVR transaction. However, this is not credible. Accordingly, both Chartwell and 
Reliance knew long before the interviews of trustee candidates that they would be working 
together on the RVR transaction. It is not completely clear how Char twell convinced 
Defendants to retain Reliance but as of February, Chartwell knew it would be able to do 
so. 
 After Reliance was hired, Reliance engage d Stout Risius Ross (SRR) to serve as 
financial advisor. Bensen never “asked SRR about its past business relationships with 
Chartwell.” (Doc. 406 at 161 -62) His explanation for this failure was “I don’t think I 
needed to.” (Doc. 406 at 161-62). Chartwell told Bensen “each of the Trustees mentioned” 
had multiple preferred advisors, and “Stout was one of them.” (Doc. 161 -62) Thus, 
Chartwell had recommended to Defendants that SRR be selected. Reliance retained the law 
firm of K&L Gates to serve as its legal advisor. 
 Bensen admitted Defendants “did not investigate the conflict process Reliance, 
SRR, or K&L Gates performed, nor did Defendants investigate the extent of the 

 
- 12 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
companies’ relationships and incentives to accept Chartwell’s positions.” (Doc. 408 at 71-
72). 
As of 2014, it is undisputed that Chartwell, Reliance, and SRR had past and ongoing 
business relationships. It is well known that “[T]he ESOP community is fairly small” such 
that companies who work in this area have “all done transactions with one another” and 
there are “relationships” between the companies. (Doc. 436 at 45). Chartwell was a major 
player in the ESOP industry so other companies, including Reliance, depended on referrals 
from Chartwell. Chartwell in its effort to persuade Defendants to hire Reliance said it “has 
long-term relationships with leading ESOP Trustees.” (Doc. 406 at 67). Reliance and 
Chartwell had previously worked together on opposite sides of ESOP transactions, but they 
had also worked together on the same side of ESOP transactions. Chartwell’s 
compensation for work on the RVR transaction was based in part on a “Transaction 
Completion Fee” of $600,000. That fee was payable only if the ESOP transaction closed. 
Thus, Chartwell had a significant financial incentive to ensure the ESOP transaction closed. 
Reliance also had a significant financial incentive not to negotiate too hard s o that 
Chartwell would continue referring business to Reliance. Similarly, SRR had a financial 
interest in ensuring its actions did not threaten its ongoing business and referral 
relationships with Chartwell and Reliance. In short, the relationships between the three 
companies meant the negotiation process would be simple and quickly negotiated to any 
result Chartwell desired. (JX 060.026; Doc. 406 at 7) 
 Once Reliance was in place as the purportedly independent trustee of the to -be-
formed ESOP, Defendants made Chartwell responsible for negotiations with Reliance . 
There was no direct communication between Defendants and Reliance. Instead, 
Defendants informed Chartwell of their positions and Chartwell then relayed t hem to 
Reliance. (Doc. 407 at 224). As Chartwell represented, Chartwell was the “quarterback.” 
 On April 16, 20 14, Chartwell employees and Defendants made an in -person 
presentation to Reliance, SRR, and K&L Gates. Chartwell and Defendants worked together 
in creating the written presentation on that date. The Defendants agreed on the “opening 

 
- 13 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
offer.” (Doc. 406 at 178). Defendants each presented information about RVR, containing 
a projection that RVR’s line of credit balance would be $59 million by May 31, 2014. The 
presentation included a timeline that, like the previous timeline, contemplated the ESOP 
transaction resolving very quickly. First, Chartwell would provide a term sheet to Reliance 
during the week of April 21. Reliance would then provide a written response “on price, 
terms and conditions” by May 5. The parties would finalize negotiations by May 12, then 
finalize all legal documentation by May 19. Board approval would be obtained by May 21 
and the transaction would close on May 30. Thus, the timeline contemplated the 
transaction would close approximately five weeks after Chartwell presented its first offer 
to Reliance. 
 In mid-April 2014, Chartwell and Defendants worked together to prepare an initial 
proposal to send to Reliance. Defendants reviewed and approved the terms of the that 
proposal. That proposal included a $143.9 million purchase price for 100% of RVR’s 
stock, plus warrants for the Smalleys to receive 32.49% of RVR’s equity on a fully diluted 
basis, and a pool of stock appreciation rights (“SARs”) equaling 17.49% of RVR’s equity 
on a fully diluted basis that could be issued to RVR management. (JX 080.025). The 
proposal also provided the seller notes would have interest at 4% cash and 6% payment in 
kind (PIK)1. Bensen was required to be appointed to the board of directors and, after the 
transaction, Defendants would be the only members of the board. (JX 084.002). 
 The proposal included a valuation of the RVR stock using the Guideline Company 
method. Chartwell used a 20% control premium in this analysis. (JX 080.015). The 
portion of the proposal titled “ESOP Equity Valuation Summary” included a subtraction 
for RVR’s interest-bearing debt of $61.9 million. (JX 080.023). Notes from a telephone 
call involving Defendants and Chartwell employees discussing the initial proposal indicate 
the intent was “to maintain equity value of $100 million.” (Doc. 436 at 114). In context, 
that meant the re was a decision to make a high initial offer such that Defendants would 
have been perceived to have negotiated down to $100 million. The initial offer was sent 
 
1 Payment-in-kind is “basically an interest rate that accrues on the loan, but it’s not paid 
until the loan is paid off at the end.” (Doc. 468 at 98). 

 
- 14 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
to Reliance on April 21, 2014. (Doc. 407 at 193). On April 26, Bensen, in order to ensure 
Smalley tax exposure decreased sent an email to Margarit telling him “We need to 
determine conclusively whether the accrued interest is taxable or not. The added $400,000 
or so per year is significant and must be paid at some point. We need to get this t o 3 
percent.” (Doc. 406 at 180). 
 Based on the timeline set out by Chartwell on April 16, 2014, Reliance had until 
May 5, 2014, to respond to the proposal, meaning Reliance had two weeks to respond with 
a counteroffer, not nearly enough time because of the rushed sequence of events. At some 
time prior to May 2, 2014, Reliance’s financial advisor SRR prepared a draft valuation. 
That draft used the Discounted Cash Flow method and the Gordon Growth method to 
estimate a terminal value of $41.2 million and an enterprise value of $67 million. (PX 
197.001). Chartwell and SRR had a telephone call on May 1, 2014. (PX 307.028). The 
record does not disclose the details of th e call, but it is more probabl e than not that 
Chartwell convinced SRR it needed to dramatically increase its valuation. On May 2, 2014, 
SRR sent a valuation report to Reliance. In it, SRR said the report was a draft and still 
needed to undergo additional internal review, but SRR was sending the draft “in the interest 
of time.” The draft was far from complete, lacking numero us appendices found in later 
versions, nor discussing valuations methods and premiums or discounts that might apply. 
The only viable reason for SRR to circulate an incomplete valuation was to comply with 
Defendants’ artificially imposed deadline. 
SRR’s May 2 valuation calculated the enterprise value of RVR using the Discounted 
Cash Flow method as well as the Guideline Company method. For the Discounted Cash 
Flow method, SRR no longer used the Gordon Growth Method. Instead, SRR calculated 
a terminal value using a multiple of 7.5 to forecasted earnings. This multiple was based 
on SRR’s Guideline Company method analysis that purported to analyze the performance 
and value of companies similar to RVR. However, the companies SRR selected as 
comparable to RVR bore little similarity to RVR. Among the companies SRR selected 
were companies that “provided remote workforce accommodations and modular space 

 
- 15 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
solutions and oil field products.” (Doc. 466 at 39 -40). Other allegedly comparable 
companies were two that manufactured and sold new RVs. (Doc. 466 at 41). The terminal 
value under this approach was $67.1 million, significantly higher than the $41.2 million in 
SRR’s earlier draft. The increase in terminal value meant SRR’s May 2 valuation claimed 
an enterprise value of $95,400,000 , almost $30 million more than the earlier draft. (JX 
093.045). 
SRR’s May 2 valuation included a 5% discount for lack of marketability. (JX 
093.029). The valuation also included a 10% control premium . That premium was 
incorporated by increasing the stock price of the companies used in the Guideline Company 
method. (Doc. 464 at 111) . According to an SRR employee, a control premium is 
appropriate when the purchaser of stock gains “certain elements of control beyond what a 
shareholder of a public company would have.” (Doc. 466 at 43). That same employee 
conceded a control premium would not be appropriate where the purchaser was not gaining 
“enough control rights or they weren’t meaningful enough.” (Doc. 466 at 113). In that 
situation, “a lack of control discount” would be appropriate. (Doc. 466 at 113). At the 
time SRR prepared its May 2 valuation, the terms of the transaction were still being 
negotiated. Given that the terms were still being negotiated, SRR’s valuation should have 
been viewed as extremely tentative. In particular, w ithout knowing the terms of t he 
transaction such as the extent of control the purchaser would have, it was not possible or 
reasonable for SRR to calculate a valuation with an appropriate level of confidence. 
Reliance’s Investment Policy Committee was responsible for reviewing and 
approving ESOP transactions. This responsibility was delegated to a subcommittee. The 
night of Friday, May 2, 2014, Wright forwarded SRR’s May 2 valuation to three members 
of the subcommittee stating, “I know there is a lot going on but we still need to meet on 
this Monday.” (JX 093.001). The subcommittee met on Monday, May 5, 2014, to review 
the ESOP transaction and SRR’s May 2 valuation. (JX 094.001). W right was the only 
committee member who reviewed the valuation report before the meeting . Defendants’ 
own expert testified it would have been preferable for the subcommittee members to review 

 
- 16 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
the valuation before the meeting. (Doc. 463 at 43). The minutes from the meeting do not 
reflect the subcommittee made any inquiries regarding the application of a control premium 
or the discount for lack of marketability. 
K&L Gates presented at the May 5 subcommittee meeting. K&L Gates noted 
Defendants’ compensation was high and was subject to employment agreements. Those 
employment agreements promised Defendants total compensation in the total amount of 
$8,590,000 each year. (JX 133.001). K&L Gates sent Chartwell due diligence requests 
regarding Defendants’ compensation on May 6, 2014. 
Despite not knowing many crucial details, including the precise contours of 
Defendants’ compensation or the amount of control the ESOP would gain, the Reliance 
subcommittee approved the counteroffer. That counteroffer was sent to Chartwell on May 
5, 2014, which was discussed with Defendants. (Doc. 406 at 183). The counteroffer was 
for $100 million plus warrants equal to 25% of RVR’s stock on a fully diluted basis, and 
SARs equal to 10% of RVR’s stock on a fully diluted basis. Reliance’s counteroffer was 
accompanied by a statement that due diligence would need to con tinue, including on 
important matters such as potential environmental damage at an RVR facility. (JX 
098.003). The counteroffer did not address the proposed interest on the seller notes 
included in Chartwell’s initial offer. 
On May 6, 2014, Martin of Reliance told SRR and K&L Gates they should have a 
telephone discussion with Chartwell to determine why the parties had reached different 
valuation numbers. (JX 097.001). Martin stated “ [t]he call is important to resolve the 
different accounting approaches which account for the large value disparity. We need a 
consensus to be able to get to a deal we can transact with. Thanks for your help to keep us 
on schedule.” (JX 097.001). That telephone call occurred on May 7, 2014, whe re 
Chartwell, SRR, Reliance, and K&L Gates discussed SRR’s valuation. 
Chartwell also had a telephone call with Bensen on May 7, 2014. (JX 099.001). 
That call was to discuss Reliance’s counteroffer. The notes of the meeting show “Eric 
thinks the proposed response is good, the likely outcome $4 million extra won’t make a 

 
- 17 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
big difference but we can adjust interest rates, et cetera. If we think it’s too high, don’t 
want to stray too far. Don’t want to go over 105.” (Doc. 406 at 193). During that call 
Bensen was informed SRR was ignoring RVR’s line of credit in its valuation. (PX 
206.001). Chartwell informed Bensen that during negotiations it would stre ss that 
“synthetic is more important than the equity price.” (PX 206.001); (Doc. 406 at 194). The 
“synthetic” was referring to warrants. Thus, Chartwell planned to stress to Reliance that 
the warrants were more important than the exact purchase price for Defendants’ stock. 
On May 8, 2014, Defendants acting through Chartwell made a counteroffer to 
Reliance, which c onsisted of a lower equity price of $115 million for more warrants of 
35% of fully diluted equity value. (JX 098.002). Defendants also proposed a lower interest 
rate on the seller notes. The following day Reliance responded with its second counteroffer 
for $105 million for the equity, 35% warrants, and 12.5% SARs. (JX 099.006). The 
interest rate on the seller notes was not addressed. Chartwell informed Defendan ts of 
Reliance’s second counteroffer on May 12, 2014. On May 13, 2014, Defendants responded 
to Reliance, again through Chartwell, agreeing to the terms of Reliance’s second 
counteroffer. (JX 107.001). 
Reaching an agreement on May 13 meant Reliance and Defendants purportedly 
resolved all issues 22 days after the initial offer. They reached an agreement despite 
ongoing due diligence and the transaction documents still being reviewed and changed. 
Inexplicably, Reliance reached a deal without first obtaining a final valuation from SRR 
that analyzed RVR’s fair market value considering all the transaction’s terms. 
While they reached an agreement on May 13, Reliance was still attempting to 
negotiate the terms of Defendants’ employment agreements. Bensen admitted one term of 
employment agreement to which Defendants agreed : “if the executive terminated their 
employment for good reason, they would get five times the bonus in salary following 
change in control.” (Doc. 407 at 14). Given the amount of compensation owed to 
Defendants on an annual basis, Reliance’s decision to agree to final terms without first 
resolving Defendants’ compensation was arbitrary and unreasonable . On May 8, 2014, 

 
- 18 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
K&L Gates sent Martin and SRR some recommended revisions to Defendants’ 
employment agreements. As of May 18, 2014, Defendants had not provided any response 
regarding the recommended revisions. On May 20, K&L Gates emailed Reliance and SRR 
noting there had been very little discussion on Defendants’ agreements. K&L Gates was 
also concerned about the terms of the employment agreements and how they would impact 
the financial fairness of the transaction . K&L Gates noted Bensen was “pushing back 
somewhat hard” on the employment agreements. (Doc. 435 at 75). 
On May 21, Allison Wilkerson of K&L Gates emailed Martin at Reliance regarding 
the negotiations of the employment agreements. Wilkerson stated “I just spoke with Greg 
[Fresh of Chartwell]. His comment was they aren’t willing to make ‘any more concessions’ 
but can’t tell me what if any concessions have been made.” (Doc. 435 at 78). Wilkerson 
then brought four items to Reliance’s and SRR’s attention she believed were cause for 
concern: 1) the employment agreements were for five year terms but renewed annu ally, 
meaning there was always at least four years left on the agreements; 2) the agreements did 
not contain non -compete or non -solicitation limitations; 3) involuntary termination or 
resignation for good cause would result in four years of severance if before a change in 
control and five years of severance after a change in co ntrol; and 4) Defendants would 
continue to receive benefits during the severance period. (Doc. 435 at 81). Martin asked 
SRR to address these concerns but there is no evidence SRR ever did so. (PX 223.001). 
Of note, K&L Gates was expressing its concern on May 21, more than a week after the 
parties purportedly reached a final agreement on the transaction’s terms. The employment 
agreements were a lways a contentious issue as shown by notes stating “To have a 
negotiated deal and then to push back on employment contracts is pissing off the sellers.” 
(Doc. 437 at 91). 
The final valuation report from SRR was produced on May 21, but it was still before 
the final details of the transaction documents had been agreed upon. SRR’s May 21 
valuation report used the D iscounted Cash Flow and Guideline Company methods to 
determine enterprise value. SRR included a 10% control premium in its Guideline 

 
- 19 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
Company method. As in prior valuations, SRR still used gu ideline companies that were 
not reasonably comparable to RVR. The May 21 report did not account for RVR’s line of 
credit. SRR did not make any deduction for the value of warrants but did apply a 5% 
discount for lack of marketability. 
Prior to May 22, 2014, the negotiations over the employment agreements were still 
ongoing. On that date Martin and Fresh exchanged emails indicating they had resolved 
their differences. Defendants had agreed to remove “change in control” as an automatic 
trigger for payment of severance benefits in exchange for a sale -or-merger blocking right 
provision for the warrant holders. K&L Gates included this agreement in its due diligence 
memo. 
Reliance received K&L Gates’ due diligence memo on the evening of May 22 , the 
day before the subcommittee meeting set for May 23, 2014. Thus, Reliance had less than 
a day to review that memo before the meeting. Williams of Reliance testified the short 
time period was not acceptable and that Reliance should have more time to review the 
memo. (PX 231.001). Martin of Reliance responded “We can study and discuss the memo, 
but we are planning to close Tuesday or Wednesday, just so you know. This has been a 
tough deal at the end to get an acceptable solution.” In other words, Reliance ’s own 
employees knew there were significant lingering issues and the closing was rushed. 
Despite that, Reliance insisted the transaction close on Defendants’ timeline , a timeline 
that did not advantage the ESOP but provided large tax benefits to Defendants. Given 
Reliance’s decision to close despite ongoing concerns, t he K&L Gates memo was merely 
intended to create a record in case of future litigation. Bensen admitted he rece ived the 
K&L Gates opinion before the close of the transaction but “doesn’t know if he read it prior 
to the closing.” (Doc. 408 at 80-85) (PX 228). The contents of the K&L Gates memo were 
not evaluated in any meaningful way by Defendants. 
On May 23, the Reliance subcommittee met and accepted SRR’s valuation report. 
Only 2 of the 9 members of the subcommittee were present. Allowing for decisions to be 
made with such a limited number of the subcommittee’s members was contrary to industry 

 
- 20 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
best practice. The subcommittee made no meaningful attempt to evaluate the soundness 
of SRR’s valuation report. For example, SRR continued to use companies that were not at 
all comparable to RVR, but the subcommittee engaged in no meaningful exploration of 
that issue. In addition, the subcommittee did not ask SRR why it had not listed all the 
documents associated with the transaction ( e.g., Trust Agreement) as documents that had 
been reviewed. 
At the May 23 subcommittee meeting SRR expressed concern that the Smalleys still 
had the right to confirm any sale of RVR and restrict any sale in the absence of such 
confirmation. (JX 113.005). In effect, this was a “blocking right.” SRR also expressed 
concern that the board of directors would consist only of Defendants. SRR noted the 
management team (i.e., Defendants) was “a close knit group and it seems inclined to stay 
that way for the time being.” (JX 113.005). In effect, SRR was saying there was no 
indication the ESOP would gain a seat on the board any time soon. K&L Gates expressed 
concern that Reliance had not been able to negotiate modifications to Defendants’ general 
employment agreements. (JX 113.004). 
Close to the completion of the transaction , Bensen aggressively advanced a 
compensation increase for the employment agreements with very favorable terms. Bensen 
participated in a telephone call with Reliance on May 21 . The “employment agreements 
were a big issue. ” The notes reflected Bensen complained “to have negotiated a deal and 
then push back on employment contracts is pissing off the sellers.” (Doc. 406 at 210). He 
continued “[w]e have five -year contracts that are evergreen. You always have four yea rs 
left on the contract. They wanted to go to three years contract, not evergreen, with one -
year renewals after that. We have very lucrative contracts, very employee friendly.” Bensen 
then reminded Reliance “we gave in on noncompetes, we assume, for the next 10 to 15 
years we [will] get paid this much money. That’s that . . . I need to get this off the table. 
I’m not going back to the boys. There is a chance they will walk.” (Doc. 210) As of May 
23, Reliance understood the deal was extraordinarily one -sided. On that date Martin of 
Reliance sent an email to Margarit at Chartwell stating: 

 
- 21 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
I need your help in keeping [Bensen] from continuing to come 
back to the plate to bat again and again on the comp issues. He 
is going to blow this deal if he keeps it up. They have gotten 
almost everything they asked for so far and to keep at the comp 
plan is only creating heartburn which I rarely get over 
transactions. I still believe at the end of the day when this deal 
is audited by DOL, they will be required to modify some of 
these provisions or risk an action. Pigs get fat and Hogs get 
slaughtered. I know you have heard that before. 
 To be clear, Reliance understood the transaction was so one -sided that if the Department 
of Labor were to investigate, the transaction could not withstand scrutiny. Despite that, 
Reliance proceeded with the transaction. Bensen admitted he received representation letters 
from Reliance and K&L gates on May 28, the day the stock purchase agreement was 
signed, but he testified because he “was not sure why [we] would,” he did not ask questions 
about “control,” “methodologies,” or “representations.” (Doc. 408 at 80-85) Reliance’s 
conduct establishes it was intent on the transaction closing on the timeline dictated by 
Defendants no matter what.2 
 The following is a summary of the negotiations regarding the financial terms of the 
transaction leading up to the final agreement. 
Date Offer or 
Counteroffer 
Equity 
Purchase Price 
Warrants SARs Interest Rate on 
Seller Notes 
April 21 RVR Initial 
Proposal 
$143.9 million 32.49% 17.49% 4% cash, 6% PIK 
May 5 Reliance 
Counteroffer 
$100 million 25% 10% Not addressed 
(Doc. 406 at 187) 
May 8 RVR First 
Counteroffer 
$115 million 35% 12.5% 3% cash, 5% PIK 
May 9 Reliance 
Second 
Counteroffer 
$105 million 35% 12.5% 3% cash, 5% PIK 
May 13 Final 
Agreement 
$105 million 35% Up to 
12.5% 
Cash interest at 
2.5%, PIK 
Compounding at 
1.05%, P IK 
noncompounding 
at 2.15% 
 
2 And Bensen, on behalf of Defendants, consistently pressed to reap Defendants’ financial 
benefits without any emphasis of ensuring compliance with their fiduciary mandates. 

 
- 22 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
Under the final terms of the transaction, Defendants received $105 million and 
warrants equal to 35% of RVR stock on a fully diluted basis . The warrants gave the 
Smalleys the right to purchase 666,667 shares of RVR stock at $7.50 per share. The 
transaction terms also allowed for SARs equal to 12.5% of RVR’s stock on a fully diluted 
basis. To finance the transaction, the Smalleys lent $95 million to RVR in exchange for 
seller notes. The seller notes had a fifteen-year term and bore cash interest at 2.5% per 
year, interest at 1.0% per year PIK, and accrued non -compounding interest at 2.15% per 
year. (Doc. 482 at 53). Thus, the total interest rate was 5.65%. Beyond financial terms, 
the transaction contained terms that ensured Defendants retained complete control over 
RVR. 
 In connection with the transaction, the RVR board of directors ( i.e., the Smalleys), 
by an action dated May 28, 2014, appointed Bensen as the third member of the board. 
Throughout the negotiations, Defendants had insisted they be the only members of the 
board after the transaction. (Doc. 435 at 71). Defendants, acting as the board, then adopted 
the ESOP Committee Charter. That charter provided the board shall appoint three or more 
members of the ESOP Committee, but all appointees had to be members of t he board. 
Thus, Defendants appointed themselves as the sole members of the ESOP Committee. The 
ESOP Committee had full power and authority with respect to RVR’s responsibilities as 
administrator of the ESOP. 
The transaction required the ESOP trustee vote as directed by the ESOP committee. 
In addition, the ESOP trustee could not make, alter, amend, or repeal RVR’s bylaws in any 
respect nor could the trustee expand the board of directors without first obtaining the 
board’s approval. Thus, vacancies on the board could be filled only b y the board, not by 
the ESOP trustee. A nominating commission was created that consisted only of board 
members. Only the nominating commission could nominate future candidates to the board. 
The ESOP trustee could vote on the nominated candidates but, again, the ESOP trustee was 
required to vote as directed by the ESOP trustee. While the ESOP trustee appeared to have 
some level of control, it was illusory because Defendants retained complete control over 

 
- 23 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
all aspects of RVR. 
The board had the authority to appoint and terminate the ESOP trustee. Therefore, 
if Defendants believed the ESOP trustee was not obediently following their directions, they 
could terminate the trustee. Under the terms of the governing documents after the ESOP 
transaction, no rational trustee would act contrary to Defendants’ wishes. 
The governing documents rendered the board responsible for all mergers and 
acquisitions regarding RVR. The board had the authority to review all M&A offers and 
disregard them if the board believe d an offer was not bona fide or in the best interests of 
the shareholders. Thus, even if a willing buyer of RVR offer to purchase the buyer could 
only purchase RVR with Defendants’ approval. 
 Defendants’ employment agreements were also amended as part of the transaction. 
The new terms only make sense in terms of adopting poison pills meant to ensure 
Defendants remained in complete control of RVR . The employment agreements were 
amended to include a provision that allowed Defendants to terminate their employme nt 
and receive severance if Defendants were required to report to a board of directors 
composed of a majority of members other than Defendants. Severance would also be due 
if Defendants were removed from the board. Then the total amount of severance due would 
range from approximately $34 million to close to $43 million. This level of severance 
guaranteed no other entity would be interested in purchasing RVR and installing new 
management. 
Defendants’ employment agreements were also amended to provide Defendants’ 
compensation could be increased above the guaranteed amount with the ESOP trustee’s 
approval, and that approval could not “be unreasonably withheld.” In effect, Defendants 
had employment agreements that promised them levels of compensation deemed “high” 
by Reliance’s SRR advisors and Reliance agreed to give Defendants the power to increase 
their compensation even more. The ESOP trustee had to agree to such increased but, 
because the ESOP trustee was directed by Defendants, there was no limit on Defendants 
increasing their own compensation whenever they wished. 

 
- 24 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
The terms of the ESOP transaction were massively one-sided in Defendants’ favor. 
Viewed as a whole, the ESOP transaction resulted in Defendants selling their equity but 
retaining their positions and complete control over RVR. Terms in the governing 
documents also meant the ESOP trustee had no real possibility to remove Defendants or 
gain a seat on the RVR board of directors. Defendants insisted on all these terms and 
Defendants, as fiduciaries, knew these terms should have resulted in the ESOP paying 
dramatically less than $105 million. As established at trial, the fair market value of the 
RVR equity given the unique terms of this transaction was less than half what the ESOP 
paid. 
II. Proper Valuation of RVR Equity 
The parties presented expert testimony o n the proper valuation of the RVR equity 
purchased by the ESOP. There was significant overlap between the experts’ testimony in 
that both experts recognized the Discounted Cash Flow method was the best way to 
determine the value of the RVR equity. The crucial differences between the two experts 
do not involve disagreements regarding which g eneral valuation methodology was most 
appropriate. Rather the expert s disagreed on discrete matters such as how to account for 
RVR’s outstanding debt and whether a control premium was appropriate. Neither expert 
was believable on all issues but, in general, the Secretary’s expert provided a more 
convincing valuation. 
A. Dr. Paul C. Wazzan 
The Secretary called Dr. Paul C. Wazzan to offer valuation opinions. Wazzan 
obtained a Ph.D. in finance from the University of California, Los Angeles, after obtaining 
a bachelor’s degree in economics from the University of California, Berkeley. Wazzan 
currently is the managing director at Berkeley Research Group, LLC, as well as president 
and chief executive officer at Wazzan & Co. Investment LLC. The latter company is a 
“venture capital firm providing seed-level funding to firms specializing in semiconductor, 
optical networking, bio-mechanical, bio-medical, and related technologies.” (Doc. 315 -1 
at 2). Wazzan has worked as an adjunct assistant professor of business and economics at 

 
- 25 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
California State University, Los Angeles, and has also taught classes at the University of 
Southern California’s business school. 
During his career, Wazzan has “conducted dozens of analyses determining the value 
of both private and public entities.” That valuation work was for litigation, business 
consulting, tax purposes, and investment guidance. Wazzan has published in peer -
reviewed economics journals, law reviews, and has testified in state and federal courts. 
Wazzan’s education, training, and experience rendered him qualified to offer his opinions 
regarding the proper valuation of the RVR stock. 
 Wazzan’s experience has involved conducting valuations using “a variety of 
methods including discounted cash flow, multiples, and arm’s length transactions.” (Doc. 
315-1 at 2). Those methods are widely recognized and accepted by valuation professionals. 
In fact, both parties agree that the discounted cash flow valuation method is appropriate 
and reliable. The parties merely disagree on the exact mechanics of applying that method 
to the present facts. At any rate, Wazzan’s opinions were sufficiently re liable to be 
admitted. 
Wazzan concluded the Guideline Company method was not appropriate in this 
company because there were not firms sufficiently “comparable to RVR.” (Doc. 315 -1 at 
13). Wazzan’s explanation was convincing. In brief, the various companies identified as 
potentially comparable to RVR are in different industries , cater to different consumers, 
operate under different competitive pressures, and are dramatically different in size. 
Wazzan then rejected other possible valuation methods, such as the Mergers & 
Acquisitions approach and the cost approach. His reasons for rejecting those methods were 
convincing and Defendants did not argue otherwise. Wazzan’s analysis, therefore, focused 
on the value of RVR’s equity using the Discounted Cash Flow (“DCF”) method. 
In conducting his DCF analysis, Wazzan relied on RVR financial projections for 
years 2014 to 2018 contained in documents generated by RVR and SRR. Wazzan then 
discounted those projected values to present value. (Doc. 315 -1 at 19). For years after 
2019, Wazzan used the Gordon Growth method to calculate a terminal value. Wazzan 

 
- 26 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
added the present value of the 2014-2018 income with the terminal value and arrived at an 
enterprise value of $72.2 million. (Wazzan defined enterprise value as “a firm’s total value 
and incorporates all ownership and asset claims from both debt and equity holders.”) (Doc. 
315-1 at 23). 
 According to Wazzan, to go from enterprise value to equity value requires 
subtracting debt, adding in cash and cash equivalents, applying discounts or premiums for 
control and marketability, and accounting for “additional claims on equity, such as 
outstanding warrants.” (Doc. 315 -1 at 23). The need to subtract debt accounts presented 
a large difference between Wazzan and Defendants’ expert. 
 Wazzan concluded the company debt of $3.0 million related to the purchase of real 
estate should be subtracted from the enterprise value. Next, Wazzan concluded RVR’s line 
of credit used to purchase RVs should be deemed “a long-term continuing debt” that must 
be subtracted from RVR’s “enterprise value in calculating equity value.” (Doc. 315 -1 at 
24). Wazzan offered two basic reasons for this: 1) RVR had never fully paid off the line 
of credit in recent years; and 2) RVR’s “projected cash flows were not adjusted downward 
to reflect paying off the line of credit.” (Doc. 315 -1 at 24). Wazzan offered a simple 
hypothetical to illustrate the need to include the line of credit when determining the value 
of RVR’s equity: 
Assume there are two different companies. They are identical, 
except one has an outstanding line of credit for $100,000 with 
5% interest, and the other has no outstanding debt. The income 
statements for the two would be identical except for the 
payment of $5,000 in interest expense and they would have the 
same EBITDA. However, the one with the outstanding line of 
credit has a $100,000 liability which represents a future cash 
outflow. A prospective purchaser would value the two 
companies differently base d upon this outstanding line of 
credit. 
(Doc. 315-1 at 58). Wazzan also explained the line of credit using a home mortgage as an 
example: 
[The line of credit is] an interest -only loan that has a balloon 
payment after a certain period of time and it literally never gets 
paid off. It’s like having a mortgage -- like having an interest-
only mortgage and you push the principal off year after ye ar 

 
- 27 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
after year. But that doesn’t mean you get to just eliminate it. 
That debt still exists. 
(Doc. 411 at 64). Here, Wazzan’s testimony was convincing. RVR’s line of credit should 
have been included in determining the value of the RVR’s equity. 
 The balance on the line of credit varied over time but it had not gone below $43 
million in recent years. Wazzan believed a “conservative position” was to subtract only 
that smallest balance. So Wazzan subtracted $4 3 million for the line of credit and $3 
million for other debt. 
 Wazzan then added cash holdings and the value of notes from RVR employees. 
(Doc. 315-1 at 25). The cash holdings were $16.34 million, and the outstanding notes were 
$1.7 million. Wazzan then concluded “the marketable, controlling interest value of RVR’s 
equity” was $44.3 million calculated as: enterprise value of $72.152 million, minus 
$45.952 million debt, plus $16.343 million cash, plus $1.725 million notes receivable. But 
Wazzan’s analysis was not finished because of the unique terms of this ESOP transaction. 
 Wazzan believed it necessary to impose a discount for lack of control because the 
ESOP had little control “over significant corporate decisions and actions.” (Doc. 315-1 at 
26). Wazzan accurately identified numerous feature where the ESOP trustee had no 
meaningful control given Defendants’ positions on the board and the ESOP Committee. 
(Doc. 315-1 at 26-28). Given the lack of control, Wazzan determine d a 17% discount for 
lack of control was necessary. (Doc. 315-1 at 28). Wazzan calculated that figure based on 
looking to the control premium s paid in other transactions analyzed in a study from 2004 
to 2013. (Doc. 315-1 at 28). That level of discount was compelling. Wazzan also believed 
a discount for lack of marketability was appropriate. Wazzan provided a lengthy 
explanation that resulted in application of a 10% discount. (Doc. 315-1 at 30). Again, 
Wazzan’s testimony regarding the need for and amount of this discount was convincing. 
Finally, Wazzan believed the warrants issued as part of the transaction should have 
been included in the valuation. The warrants gave the Smalleys the option to purchase 
666,667 shares of RVR stock at an exercise price of $7.50 per share. Wazzan believed 

 
- 28 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
those warrants had to be viewed as claims on RVR’s cash. (Doc. 315 -1 at 31). In other 
words, he claimed the warrants impacted the equity value of the RVR stock. To calculate 
the warrants’ impact, Wazzan used “the standard Black -Scholes option pricing model.” 
(Doc. 315-1 at 32). Using that model, Wazzan determined the 666,667 warrants had a 
value of $19.3 million. Including the value of the warrants in determining the value of the 
equity was the one aspect of Wazzan’s opinion that was not convincing. 
 Defendants argued the warrants were meant to operate as additional compensation 
for the Smalleys accepting a below -market interest rate on the seller notes. Wazzan 
testified the seller notes already had market rates , but that was not compelling. The seller 
notes were “the most subordinated debt in the company” and were “unsecured . . . so there 
[was] no collateral if there [was] a default on the notes.” (Doc. 468 at 88). In other words, 
the seller notes would have commanded a higher interest rate if the warrants had not been 
included. While not indisputable, the Court rejects Wazzan’s opinion that the warrants 
should have been subtracted. 
Based on all the additions and subtractions from enterprise value Wazzan claimed 
appropriate including the warrants, he arrived at fair market value of the equity was $13.7 
million. (Doc. 315-1 at 34). Because the warrants should not be included, $19.3 million 
must be added back in for resulting sum a fair market value of $33 million. 
B. Jeffrey S. Tarbell 
Defendant’s valuation expert was Jeffrey S. Tarbell. He received a bachelor’s 
degree in business administration in 1990 and a Master of Business Administration in 1997. 
Currently, Tarbell is a Director at a financial services firm and a member of th at firm’s 
Financial and Valuation Advisory Services prac tice. (Doc. 324 at 7). Tarbell is the head 
of the firm’s Employee Stock Ownership Plan valuation practice. Over the course of his 
career, he has worked on approximately 1,000 valuation matters, including more than 200 
valuations in the specific context of ESOPs. Tarbell is the member of various professional 
organizations devoted to ESOPs and valuations. He also is a contributing author to 
valuation treatises. (Doc. 324 at 7-8). Tarbell’s education, training, and experience render 

 
- 29 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
him qualified to offer his opinions regarding the proper valuation of the RVR stock. 
Tarbell used the Guideline Company method and the Discounted Cash Flow method 
to determine the value of RVR’s stock. Those methods are widely recognized as reliable 
approaches for assessing valuation and Tarbell’s opinions were sufficiently reliable to 
admit them. 
For his Guideline Company analysis Tarbell identified six companies as potentially 
comparable to RVR: AMERCO (Uhaul), Avis Budget Group, Inc., CanaDream Corp., 
Hertz Global Holdings, Inc., Ryder System, Inc., Tourism Holdings Limited. (Doc. 324 at 
33). Tarbell admitted these companies “are not perfectly comparable to RVR,” but he 
believed they were close enough. However, as Wazzan noted these companies are starkly 
different. For example, RVR ha d annual revenue of $93 million. By contrast, Hertz ha d 
annual revenue of $10.7 billion. Thus, Hertz had approximately 115 times more in annual 
revenue than RVR. (Doc. 468 at 14). In addition, Hertz ha d approximately 11,555 
locations, approximately 100 times more than RVR. Hertz operated in 145 countries while 
RVR operate d in two. (Doc. 466 at 39). He offered a nother allegedly comparable 
company, Avis, that had annual revenue of $8.1 billion and operate d in 175 countries. 
Beyond Hertz and Avis, the other companies Tarbell identified as sufficiently comparable 
were not remotely close to RVR. Like Hertz and Avis, t hose other companies had 
significantly different revenues and operations from RVR and some of them were involved 
in very different markets. 
Tarbell’s use of these comparable companies was also contrary to an opinion 
expressed by Chartwell at one point in time. In conducting its analysis, Chartwell had 
considered some of the same companies Tarbell used but Chartwell concluded those 
companies were not comparable to RVR. Chartwell determined there was “no publicly 
traded companies that were truly comparable to [RVR].” (Doc. 468 at 31). Based on the 
vast differences between the companies, Tarbell’s use of the Guideline Company method 
is not worthy of any consideration. 
As did Wazzan, Tarbell also used the D CF method. Tarbell followed most of the 

 
- 30 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
same steps as Wazzan. Tarbell relied on “projected financial results . . . prepared by RVR 
Management” to project net cash flows for 2014 through 2018. (Doc. 324 at 39). Tarbell 
then identified “RVR’s expected net cash flows expected to be received after the end of the 
projected period (i.e., in 2019 and beyond), commonly referred to as the ‘terminal value.’” 
(Doc. 324 at 41). To determine the terminal value, Tarbell recognized that appraisers 
typically use either the Gordon Growth method or the Exit Multiple method. (Doc. 324 at 
41). Tarbell rejected this method as “not practical” in this case because of “the composition 
of RVR’s net cash flows and RVR’s substantial capital expenditures relative to 
depreciation.” (Doc. 324 at 43). Thus, Tarbell used the Exit Multiple method. That 
method, however, relies on looking to the multiple s for the guideline companies Tarbell 
used in his Guideline Company method and if those companies are not comparable, the 
Exit Multiple method is not reliable. (Doc. 468 at 48). But during Tarbell’s cross -
examination he admitted if the guideline companies “ are not re asonably similar to the 
company being valued, the multiples derived from those guideline companies would not 
provide reliable a basis to derive terminal value in a discounted cash flow analysis.” (Doc. 
468 at 48). 
In fact the guideline companies Tarbell selected bore no meaningful resemblance to 
RVR. Thus, using exit multiples from those companies renders the results from the Exit 
Multiple method little better than random. But accepting for the moment Tarbell’s 
approach, Tarbell arrived at an equity value of $107.6 million to $122.8 million. (Doc. 324 
at 53). Tarbell did not subtract “the balance of RVR’s revolving line of credit because [he] 
considered that item to be an operating liability ( i.e., working capita l) rather than a 
permanent financing source.” (Doc. 324 at 53). Tarbell’s decision to not include the line 
of credit requires a further analysis. 
Tarbell explained failure to subtract the balance on the revolving line of credit was 
because the “line of credit has a cost to RVR in the form of interest expense” and Tarbell 
“deducted that interest expense . . . from the RVR earnings figures” elsewhere in his 
analysis. Thus, Tarbell concluded “[i]t would be improperly double counting the impact 

 
- 31 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
of the vehicle line of credit to have also subtracted the line of credit balance from [his] 
estimate enterprise value range.” (Doc. 324 at 53). The sources Tarbell cited for this 
approach were a very strange mix of documents. 
As alleged support for not including the line of credit, Tarbell cited a webinar titled 
“Valuing Auto Dealerships.” (Doc. 467 at 37). Why this webinar should be viewed as 
authoritative was not explained at trial. Tarbell did not use auto dealerships as potentially 
comparable companies in conducting his valuation analyses and the methods appropriate 
for valuing auto dealerships likely differ from th ose appropriate for a business such as 
RVR. (Doc. 467 at 45). 
Allegedly offering further support for his treatment of the line of credit, Tarbell cited 
to a document where the accounting firm Deloitte stated it was appropriate to not consider 
debt as permanent financing. That statement was in the context of Deloitte analyzing a 
company known as Rocky Mountain Dealerships Inc. Tarbell claimed the company “sells, 
rents, leases, and provides support services for new and used agricultural and industrial 
equipment.” (Doc. 324 at 18 -19). At trial, however, t he Secretary pointed out Rocky 
Mountain had not reported any “revenue form the lease or rental of equipment.” (Doc. 467 
at 47-48). In addition, Tarbell agreed that Rocky Mountain treated “floor plan financing 
used to acquire new equipment for sale through Rocky Mountain’s dealerships differently 
than long-term interest-bearing debt.” (Doc. 467 at 55). Because the business of Rocky 
Mountain Dealerships bears no resemblance to the business of RVR, the valuation practices 
appropriately applied to Rocky Mountain Dealerships has no weight. 
Tarbell also cited a statement from a Wall Street research analyst that in determining 
valuation for the company Hertz, the analysis excluded the vehicle debt. (Doc. 324 at 19). 
However, as pointed out at trial Hertz’s rents its cars for only one year before selling them. 
(Doc. 467 at 59). That short period allowed for Hertz to assert the cars were “short -term 
operating assets.” By contrast, RVR rents its vehicles for five or six years before selling. 
While there may be disagreements regarding the def inition of “short -term,” Tarbell’s 
assertion that assets sold in one year should be treated the same as assets held for six years 

 
- 32 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
has no support. 
Overall, Tarbell’s decision to not include the balance on the line of credit was 
unclear and unreasonable. Tarbell’s approach to the warrants, however, was convincing. 
Tarbell did not adjust the equity value based on the warrants. According to Tarbell, 
the warrants “enabled RVR to obtain a definite lower cash interest rate on the seller notes.” 
(Doc. 324 at 56). The seller notes had an overall interest rate of 5.65%. Tarbell claims 
this rate was far below the market interest rate of 13% and 16%. (Doc. 324 at 55). Thus, 
Tarbell viewed the warrants as “designed to entice the [Smalleys] to provide transaction 
financing with a low cash interest rate.” (Doc. 324 at 57). And viewing the warrants as 
compensating the Smalleys for accepting an allegedly below-market interest rate meant the 
warrants were simply “a component of the transaction financing.” (Doc. 324 at 56). As 
discussed, this approach is more credible than assuming the interest rate was sufficient on 
its own. Wazzan presented testimony that 5.65% was higher than the interest rate on 
corporate junk bonds. (Doc. 315 -1 at 64). Moreover, the Smalleys retained almost 
complete control over RVR such that they wou ld have control over “activities which 
directly bear on the payment of the [seller notes].” (Doc. 315-1 at 64). But the seller notes 
were deeply subordinated and unsecured. While a close call, the Court accepts Tarbell’s 
view that the warrants should be viewed as supplementing the notes’ artificially low 
interest rate. Tarbell’s next opinion, however, was the least plausible aspect of his entire 
testimony. 
Tarbell disputed whether any discount for lack of control was appropriate. The main 
support for this was Tarbell’s view that “the ESOP had substantial elements of control.” 
(Doc. 324 at 78). Tarbell’s support for this conclusion was nonsensical. Tarbell claimed 
that Defendants would be the only members of the board of directors did not mean the 
ESOP lacked control because “the board composition was agreed upon by Reliance.” 
(Doc. 324 at 80). Tarbell provided no explanation why merely Reliance’s agreement meant 
the ESOP had control. Next, Tarbell stated the ESOP trustee had the power to remove 
board members at any time. (Doc. 324 at 80). But that makes no sense. Merely because 

 
- 33 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
the ESOP trustee could remove board members does not equate to control. Moreover, 
given the amount of compensation that would be due paid Defendants if removed from the 
board, it was impossible to remove them. 
Tarbell also claimed the ESOP trustee had elements of control because it could 
refuse to approve a candidate nominated to the board of directors. But the ESOP trustee 
was a directed trustee so it would be required to vote as directed by the Defendants as 
members of the ESOP Committee. And the board of directors had the sole power to 
nominate candidates. So the ESOP trustee voted only on candidates nominated by 
Defendants. Thus, the ESOP trustee had no real ability to control the composition of the 
board. 
Every other aspect of purported control offered were illusory. (Doc. 324 at 81-83). 
Defendants insisted that despite selling all their stock, they retained complete control of 
RVR.3 Tarbell admitted that buyers who obtain no meaningful control would not pay a 
controlling-interest value. (Doc. 467 at 147). Tarbell’s opinion that no discount for lack 
of control was not accepted. 
Tarbell did include a 5% discount for lack of marketability. His declaration, and 
this was to account for the fact that RVR’s stock “is not registered to trade on any stock 
market or exchange,” meaning it has “limited marketability.” (Doc. 324 at 58). But on 
cross-examination Tarbell testified he did not believe a discount was appropriate, but he 
applied the discount solely because “court guidance suggests that we do.” (Doc. 468 at 
65). Tarbell concluded the RVR equity had a v alue of $102.3 million to $116.6 million. 
But due to flaws in Tarbell’s, Wazzan’s valuation establishes fair market value close to the 
value derived from the convincing portions of his testimony. 
Tarbell began with an enterprise value range of $91.9 to $107 million. The Court 
 
3 Defendants also presented testimony from Edward A. Wilusz that a control premium was 
appropriate because a “100% stockholder always retains the right to receive a controlling 
interest purchase price when the Company is later sold to a third -party buyer.” (Doc. 354 
at 52). That statement merely assumes that sale of 100% of the stock will merit a 
“controlling interest purchase price.” But it is implausible a willing buyer would pay such 
a price when the purchase is accompanied by terms that prohibit the buyer from directing 
the company business in any way. 

 
- 34 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
will use the $107 number to show how inflated the purchase price paid by the ESOP was.4 
RVR’s cash and notes receivable were $18.7 million, meaning an implied total enterprise 
value of $125.7 million. The line of credit and term debt total $46 million, which is 
subtracted. Thus, Tarbell’s higher number would produce an implied total equity value of 
approximately $79.7 million. T hen as Tarbell a greed a 5% reduction for lack of 
marketability would be made bringing reducing the value to $75.7. But this does not 
subtract discount for lack of control. A 17% discount for lack of control was applied, the 
result would be $62 million . While clearly more than Wazzan’s value, Tarbell’s 
recalculated number is forty three million dollars less than t he purchase price paid by the 
ESOP. The ESOP paid a substantially inflated purchase price. 
C. Conclusions Regarding Experts and Value 
Most of Wazzan opinions regarding RVR’s value were convincing Tarbell’s were 
not. Significantly Wazzan recognized Defendants were not giving up any of RVR. But 
Wazzan’s opinion that the value of the warrants should have been subtracted is not 
accepted. The warrants can be viewed as compensating the Smalleys for the below market 
rate of return on the seller notes. Thus, Wazzan’s approach is accepted except for the 
warrants. 
The RVR equity purchased by the ESOP had a fair market value of approximately 
$33 million, calculated as: 
Enterprise Value: $72.2 million 
Line of Credit Debt and Real Estate Debt: $46 million 
Cash and Securities: $16.34 million 
Notes Receivable: $1.7 million 
Thus the marketable, controlling interest value is $44.3 million. The unique features of the 
transaction, especially the lack of control, requires application of two discounts: 
Discount for Lack of Control: 17% or $7.5 million 
Discount for Lack of Marketability: 10% or $3.7 million 
 
4 Using the higher number is also supported by the fact that subtracting the line of credit 
balance likely would have required the interest payments be handled differently. 

 
- 35 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
Application of these discounts results in a fair market value of $33 million. Accepting the 
actual fair market value of the RVR equity was $33 million , the equity was not worth 
anything close to the $105 million Reliance and Defendants expected and agreed upon. 
III. Analysis of Claims 
As set forth in the Pretrial Order, there are four claims against Defendants: 
1. Defendants breached their fiduciary duty to monitor Reliance (Doc. 298 at 5); 
2. Defendants have co-fiduciary liability for Reliance’s violations of ERISA; 
3. Defendants, as non -fiduciaries, knowingly participated in Reliance’s fiduciary 
breaches and knowingly participated in a prohibited transaction; 
4. Defendants’ indemnification agreements are void. 
The Secretary’s claims depend upon establishing Reliance violated ERI SA regarding the 
RVR tra nsaction, meaning the Court must first analyze Reliance’s behavior before the 
Defendants. Before doing so, however, there is an i nitial dispute whether Defendants 
qualified as fiduciaries. In particular, whether Bensen qualified as a fiduciary at all relevant 
times. 
The Smalleys were members of the board at the time Reliance was appointed and 
easily qualify as fiduciaries. Bensen was not yet a member of the board at that time, but 
as the facts established he was a very active participant in appointing Reliance. He actively 
participated in the selection of Reliance which was a decision made by all three Defendants. 
In his capacity as Chief Financial Officer of RVR, Bensen signed the Trust Agreement 
between Reliance and RVR. Accordingly, Bensen was a fiduciary and all Defendants were 
fiduciaries responsible for the appointment of Reliance as ESOP Trustee. ( See also Doc. 
277 at 30-32) (explaining why Bensen’s involvement rendered him fiduciary). 
A. Reliance’s Breaches 
 While Reliance is no longer a defendant, Defendants’ trial strategy involved 
attempting to prove Reliance’s actions were valid. However, Reliance clearly breached its 
duties of loyalty and prudence. Reliance was required to act “for the exclusive purpose of 
. . . providing benefits to participants and their beneficiaries.” 29 U.S.C. § 1104(a)(1)(A). 

 
- 36 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
Reliance was also required to act “with the care, skill, prudence, and diligence under the 
circumstances then prevailing that a prudent man acting in a like capacity and familiar with 
such matters would use in the conduct of an enterprise of a like charact er and with like 
aims.” 29 U.S.C.A. § 1104(a)(1)(B). The evidence shows Reliance did not act in the 
participants’ interest nor did it act as a “prudent man.” 
Reliance had ongoing relationships with Chartwell and SR R such that none were 
willing to challenge the other. Despite clear misgivings about the transaction, Reliance 
was unwilling to question the insistence by Chartwell and Defendants on certain vital 
terms. Moreover, it agreed to an extremely short timeline for closing the transaction. That 
timeline meant Reliance was negotiating without adequate information regarding matters 
that impacted RVR’s value. For example, at the time Reliance was making counteroffers, 
it had not completed its due diligence regarding environmental issues, had not yet evaluated 
the terms of Defendants’ employment agreements, and did not know what level of control 
Defendants would insist upon retaining. Reliance’s internal emails show an obsession with 
closing on Defendants’ timeline regardless of concerns. (PX 231.001) (“We can study and 
discuss the memo, but we are planning to close Tuesday or Wednesday, just so you know. 
This has been a tough deal at the end to get an acceptable solution.”). A prudent fiduciary 
would not allow an arbitrary deadline to prevent a complete, fair, and accurate evaluation. 
 Connected to its devotion to close on Defendants’ schedule, Reliance did not 
meaningfully engage with the valuations prepared by SRR. Because the terms of the 
transaction were still being negotiated, certain aspects of SRR’s work should have been 
scrutinized with far more care. For example, SRR used a 10% control premium in its 
valuations. Because it was unclear what actual level of control, if any, the ESOP trustee 
would gain, Reliance had an obligation to inquire why a control premium was being used. 
Similarly, SRR’s Guideline Company used companies not remotely similar to RVR , and 
Reliance made no inquiry why those companies were chosen. Reliance also failed to 
inquire and understand why SRR was ignoring RVR’s line of credit. 
 During the RVR transaction Reliance failed to follow its own internal guidelines. 

 
- 37 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
While this does not always establish Reliance breached its fiduciary duty, it illustrates 
Reliance was intent on the transaction closing no matter what. The subcommittee members 
did not prepare in advance of the May 5 meeting. And for unknown reasons, only two 
members of the subcommittee were present when it voted to accept SRR’s valuation report 
and approve the transaction. Reliance viewed the entire process as largely a sham, meant 
to generate a facially plausible, acceptable record while ensuring Chartwell and its clients 
received whatever they wished and asked for. 
 And Reliance failed to meaningfully negotiate the terms beyond the total purchase 
price. The record shows Reliance was willing to negotiate only on the financial terms of 
the transaction. Thus, there are records of offer and counteroffers. But Reliance did not 
care about the specifics beyond the basic financial terms. Reliance acceded to Defendants’ 
insistence that they be the sole members of the board of directors; Reliance agreed to terms 
allowing Defendants to review all mergers and acquisition acti vity; Reliance failed to 
challenge the high compensation Defendants received under their employment agreements; 
Reliance agreed Defendants could increase their own compensation levels whenever they 
wished, subject to a toothless approval requirement by the ESOP trustee; Reliance agreed 
to terms that would pay out massive severance if Defendants were removed; and Reliance 
allowed the transaction to proceed despite it knew the Department of Labor would likely 
step up on learning the terms of the transaction. Reliance was well aware that Defendants 
were the beneficiaries of a ludicrous one-sided transaction yet Reliance proceeded in clear 
breach of its fiduciary duties. 
 And Reliance violated the obligation to comply with the terms of the ESOP. ERISA 
required Reliance comply with the terms of the ESOP’s governing documents. 29 U.S.C. 
§ 1104(a)(1)(D). The relevant ESOP documents required Reliance pay no more than 
“adequate consideration” for RVR stock and prohibited Reliance from engaging in a 
prohibited transaction where no exemption applied. Reliance violated those requirements. 
B. Defendants’ Duty to Monitor 
When, as here, “members of an employer’s board of directors have responsibility 

 
- 38 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
for the appointment and removal of ERISA trustees, those directors are themselves subject 
to ERISA fiduciary duties, albeit only with respect to trustee selection and retention.” 
Johnson v. Couturier , 572 F.3d 1067, 1076 (9th Cir. 2009). This duty involving trustee 
selection and retention is known as the “duty to monitor.” The Department of Labor has 
provided little guidance on the scope of this duty. But the available guidance states a 
fiduciary’s “duty to monitor” the performance of other fiduciaries requires review of the 
other fiduciaries’ performance “[a]t reasonable intervals . . . to ensure that their 
performance has been in compliance with the terms of the plan and statutory standards, and 
satisfies the needs of the plan.” 29 C.F.R. § 2509.75 -8(FR-17). There is “[n]o single 
procedure . . . appropriate in all cases,” and fiduciaries with the duty to monitor must 
consider the particular “facts and circumstances” in determining how best to accomplish 
the necessary monitoring. Id. 
In monitoring Reliance, Defendants were required to act with “the care, skill, 
prudence, and diligence under the circumstances then prevailing.” 29 U.S.C. § 1104(a)(1). 
This required Defendants ensure they knew what was happening and if they did not, they 
had to take steps to learn. It is not an excuse that they were not lawyers. As explained by 
the Ninth Circuit, hiring ostensibly independent experts “is not a complete defense to a 
charge of imprudence.” Howard v. Shay, 100 F.3d 1484, 1489 (9th Cir. 1996). Even when 
a fiduciary hires an expert, the fiduciary must “(1) investigate the expert’s qualifications, 
(2) provide the expert with complete and accurate information, and (3) make certain that 
reliance on the expert’s advice is reasonably justified u nder the circumstances.” Id. And 
a fiduciary must “more closely scrutinize an expert’s advice if red flags indicate[] that the 
expert’s methods might be unsound.” Appvion, Inc. Ret. Sav. & Emp. Stock Ownership 
Plan by & through Lyon v. Buth , 99 F.4th 928, 946 (7th Cir. 2024). See also Brundle on 
behalf of Constellis Emp. Stock Ownership Plan v. Wilmington Tr., N.A. , 919 F.3d 763, 
773 (4th Cir. 2019) (noting expert advice “is not a magic wand that fiduciaries may simply 
wave over a transaction to ensure that their responsibilities are fulfilled”). 
Defendants have a ttempted to excuse their behavior by claiming they were not 

 
- 39 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
financial professionals and they lacked “actual knowledge” that something was off with 
Reliance’s behavior.5 But the knowledge standard for a duty to monitor claim is “knew or 
should have known.” To hold otherwise would allow ERISA fiduciaries to “avoid liability 
by professing ignorance.” (Doc. 277 at 41). Or as the Fourth Circuit said regarding the 
claim of to a trustee that had not acted in bad faith: a plaintiff “need not prove that the 
fiduciary acted in bad faith. Rather, an ESOP fiduciary is liable . . . if it breached its 
fiduciary duties, i.e., failed to act solely in the interest of the participants with the care, 
skill, prudence, and diligence used by a prudent man acting in a like capacity.” Brundle 
on behalf of Constellis Emp. Stock Ownership Plan v. Wilmington Tr., N.A., 919 F.3d 763, 
773 (4th Cir. 2019) (quotation mar ks and citations omitted). The appropriate focus is not 
on the fiduciary’s motives or actual knowledge but on whether the fiduciary “engaged in a 
reasoned decisionmaking process, consistent with that of a prudent man in like capacity.” 
Id. “[A] pure heart and an empty head are not enough” to avoid liability. Id. Here while 
Defendants retained professional assistance there were glaring red flags such that 
Defendants had actual knowledge that Reliance was breaching its duties. 
The Court notes, and the evidence shows, Defendants knew they had an obligation 
to monitor Reliance, but the evidence also shows Defendants did not to do so. In fact, the 
evidence established Chartwell repeatedly represented to Defendants that Chartwell and its 
partners would ensure Defendants would receive all they wanted including the desired 
price and terms. Chartwell recommend Reliance and SRR, knowing that they would 
accede to Chartwell’s demands. From the outset Defendants made no serious inquiries into 
the nature of the relationship between Chartwell, Reliance, and SRR , and in particular, 
whether they had conflicts. If they had, they would have discovered the three companies 
had referral relationships making it unlikely that the negotiations would qualify as arms-
length. 
The first major red flag was Defendants’ insistence on an abbreviated timeline 
solely to obtain tax benefits. Given the amount of money at stake, and the need for careful 
 
5 This is refuted by their business and accounting educations, that they were consistently 
the only governing officers of RVR and vast experience managing the company. 

 
- 40 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
research into all aspects of RVR’s operations, Reliance’s agreement to such an abbreviated 
timeline should have made clear Reliance had gone astray. Defendants knew negotiations 
were occurring long before Reliance had sufficient information, and long before the crucial 
non-financial terms of the transaction were resolved. The Fourth Circuit concluded a very 
similar timeline in an ESOP case should have been cause for concern. 
In the Fourth Circuit case, the trustee had “completed their due diligence, made 
pricing decisions, conducted negotiations, and launched a tender offer in less than two 
months.” Brundle on behalf of Constellis Emp. Stock Ownership Plan v. Wilmington Tr., 
N.A., 919 F.3d 763, 778 (4th Cir. 2019). The timeline selected was “[t]o maximize the 
after-tax benefits to the Sellers.” Id. Here, the deadlines were set to maximize Defendants’ 
benefits. As already noted, Reliance knew it was rushing matters and Reliance appears to 
have violated its own internal policies to meet the artificial closing deadline insisted by 
Defendants. Defendants may not have known Reliance was violating its own policies, but 
Defendants knew everyone was struggling to meet an artificially imposed deadline. The 
Defendants knew the rushed timeline was not sufficient for a prudent fiduciary to act. 
The second major red flag was Reliance negotiating the topline number of the 
transaction at a time when crucial issues that would impact the transaction were either 
undecided or unknown to Reliance. For example, Reliance was engaged in negotiations 
despite not knowing the terms Defendants would finally accept for their employment 
agreements. And Defendants aggressively insisted on highly favorable terms. After the 
transaction, those employment agreements promised almost half the purchase price in 
severance should the ESOP trustee seek to remove Defendants. In addition, the transaction 
granted Defendants the ability to increase their compensation as they wished. No 
reasonable trustee would have negotiated the topline price without being certain of the 
terms of the employment agree ments. Similarly, Defendants always insisted they retain 
control of RVR even if the trustee would have no control . It is common sense that 
Reliance’s failing to include a sizeable discount for lack of control was wrong. 
The next red flag was Defendants knew Reliance was not including the balance on 

 
- 41 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
the line of credit in its valuation which had a very significant balance at all relevant times. 
A valuation that did not include the line of credit should have been obvious or prompted 
Defendants to conduct a serious investigation to determine why that was proper. The fact 
that self-described experts were arguing it was proper to not include the line of credit does 
not excuse Defendants’ failure to investigate. As explained by the Ninth Circuit, if there 
are “uncertainties” even “after a careful review of the valuation and a discussion with the 
expert . . . the fiduciary should have a second firm review the valuation.” Howard v. Shay, 
100 F.3d 1484, 1490 (9th Cir. 1996). Instead of doing so, Defendants merely accepted the 
counterintuitive proposition that it was proper to not consider approximately $50 million 
in debt. 
The most glaring red flag was Defendants knew they were retaining complete 
control over every aspect of RVR despite Reliance paying a purchase price identified as 
“controlling interest value.” Defendants sold 100% of the stock but they were the sole 
members of the board of directors, Defendants retained control over RVR’s operations 
given their employment positions, Defendants were members of the ESOP Committee 
responsible for the a ppointment and removal of the ESOP trustee, and Defendants knew 
they could raise their already high salaries to any amount they wished. 
Defendants experience with the Budget purchase meant they understood the need to 
retain control over RVR and they insisted the transaction proceed only under terms that 
would ensure they retained control. Despite knowing Reliance would gain no control, 
Defendants allowed Reliance to act as if equity was worth $105 million, a price Defendants 
knew had been calculated using a control premium. It is inconceivable to believe 
Defendants thought the purchase price was reasonable given the limitations on the ESO P 
trustee’s power. The Seventh and Fourth Circuits have addressed situations where an 
ESOP did not gain sufficient control to merit a control premium and the ESOP in the 
present case gained even less control than the ESOPs in those cases. 
In Appvion, Inc. Retirement Savings and Employee Stock Ownership Plan v. Buth , 
99 F.4th 928 (7th Cir. 2024), the plaintiff alleged an ESOP fiduciary had not questioned 

 
- 42 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
valuations prepared by one of the same firms involved in the present case: SRR. Id. at 946. 
There, SRR’s valuation for the fiduciary “added a 10% control premium to the company’s 
enterprise value to account for the [ESOP’s] controlling interest.” Id. at 946. But that 
control premium was “not justified by actual control.” Id. The ESOP trustee had “long 
ago ceded to [the company’s] CEO most of the [ESOP] participants’ power over the 
composition of [the company’s] Board, and the [ESOP] participants were allowed to vote 
only on extraordinary actions by the Board (such as a sale of the company). For all other 
matters, the trustee was required to vote the [ESOP’s] shares as directed by t he ESOP 
Committee.” Id. The Seventh Circuit concluded allegations that SRR continued to use a 
control premium was a “red flag” a prudent fiduciary would have investigated. Id. at 947. 
The Fourth Circuit addressed a finding of liability against an ESOP trustee for 
breach of fiduciary duty. Once again it was SRR at the heart of the improper valuation. 
The ESOP trustee had hired SRR “to be the financial advisor on the ESOP’s purchase” of 
company stock. Brundle on behalf of Constellis Emp. Stock Ownership Plan v. Wilmington 
Tr., N.A. , 919 F.3d 763, 771 (4th Cir. 2019) . The ESOP trustee did not, however, 
“adequately probe” the reliability of SRR’s valuation. Id. at 775. One of the trust ee’s 
“major failure[s]” was not questioning SRR’s application of a 10% control premium. Id. 
at 777. The Fourth Circuit explained “[p] urchasers will generally pay more for rights 
associated with control of the enterprise. ” Id. And in this context “control” is defined as 
“an interest which allows the shareholder to unilaterally direct corporate action, select 
management, decide the amount of distribution, rearrange the corporation ’s capital 
structure, and decide whether to liquidate, merge, or sell assets.” Id. Under this definition 
and the terms of the ESOP transaction, use of a control premium was inappropriate. 
The Fourth Circuit concluded there was sufficient evidence establishing “the ESOP 
essentially had no power to control [the company].” Id. Similar to the RVR transaction, 
the transaction in Brundle “was intentionally designed to maintain the sellers’ control over 
[the company] even after selling their shares.” Id. The sellers in Brundle had “retained the 
power to appoint a majority of the [company’s] board, a key indicator of control.” Id. The 

 
- 43 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
ESOP trustee was also “required . . . to vote its shares as the [company’s] board (not the 
ESOP) directed.” Id. 
The ESOP trustee in Brundle made a very similar argument to that of by Defendants 
regarding 100% ownership of shares. The Brundle trustee claimed application of “a 10% 
control premium was justified by the fact that the ESOP owned 100% of [the company’s] 
shares and obtained elements of control.” Id. at 777. The trustee argued “control premiums 
are often between 35 -40%” and a modest 10% premium was justifiable in that case. 
However, the Fourth Circuit concluded the almost complete lack of control granted by the 
governing documents meant owning 100% of the shares was not sufficient to merit a 
control premium. Because the ESOP was not gaining any meaningful control, the ESOP 
trustee “should have done more to challenge the use of any control premium.” Id. 
The RVR transaction was structured such that the ESOP trustee clearly gained no 
control. Reliance’s failure to probe that issue and properly account for that lack of control 
should have been obvious to any prudent fiduciary. In simple terms, it seems obvious 
Defendants, with their relevant educational backgrounds and vast business experience, 
must have wondered why Reliance was willing to pay $105 million for the RVR stock but 
agree to leave every material aspect of control in Defendants’ hands. Entering into such a 
one-sided transaction, when Defendants knew precisely how one -sided it was, constituted 
a breach of Defendant’s duty to monitor Reliance. 
C. Prohibited Transaction 
Reliance was a fiduciary to the ESOP and Defendants were parties in interest 
pursuant to 29 U.S.C. § 1002(14)(H) because they were employees, officers, directors (or 
individuals having powers or responsibility to those of officers or directors) of RVR. 
Smalleys were also parties in interest under 29 U.S.C. § 1002(14)(H) because they were 
10% shareholders directly or indirectly of RVR. The various trusts were also parties in 
interest as 10% shareholders directly or indirectly of RVR. 
 The Court held at summary judgment Reliance had engaged in a “prohibited 
transaction” under ERISA. (Doc. 277 at 29). A defendant wishing to avoid liability for 

 
- 44 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
participating in a prohibited transaction bears the burden of proving one of the exemptions. 
The relevant exemption here permits “the acquisition or sale by a plan of qualifying 
employer securities” if the acquisition is for “adequate consideration.” 29 U.S.C. 
§ 1108(e). “Adequate consideration” is the “fair market value of the asset as determined 
in good faith by the trustee or named fiduciary.” 29 U.S.C. § 1002(18). The record 
establishes Reliance did not come close to satisfying its obligation to es tablishing the fair 
market value exemption. Thus, Reliance engaged in a prohibited transaction that is not 
subject to any exemption. 
D. Indemnification 
The Secretary seeks a ruling that Defendants cannot be indemnified by RVR. 
ERISA prohibited “indemnification of a fiduciary by the ERISA plan itself.” Johnson v. 
Couturier, 572 F.3d 1067, 1080 (9th Cir. 2009) . The Ninth Circuit has held 
indemnification is not appropriate when it would have the effect of “asking ESOP 
participants to pay for Defendants’ defense costs.” Id. The RVR ESOP owns 100% of the 
RVR stock and any payment of Defendants’ defense costs by RVR has the effect of 
reducing the value of the ESOP. That is prohibited. 
Even if not prohibited by ERISA, the terms of the indemnity provision in the ESOP 
Plan document and RVR’s Articles of Incorporation do not apply if Defendants engaged 
in “willful misconduct” or “intentional misconduct.” Because Defendants knowingly 
breached their fiduciary duties, they engaged in willful or intentional misconduct. Thu s, 
indemnification is inappropriate under the terms of the Plan document. 
IV. Motion to Strike 
 Defendants moved to strike the Secretary’s reply regarding the findings of fact and 
conclusions of law. Defendants argue the reply is one page over the page limit. The Court 
did not rely on the final page of the Secretary’s filing. Therefore, the motion to strike will 
be denied as moot. 
V. Additional Proceedings 
Having concluded Defendants breached their fiduciary duties and allowed Reliance 

 
- 45 - 
 
 
 
1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
 
to engage in a prohibited transaction, the remaining issues involve available remedies. At 
the beginning of this suit, the Court bifurcated liability and remedies. The parties will be 
required to confer and file a joint statement outlining what additional discovery, if any, is 
needed before the Court can obtain briefing regarding the appropriate remedies. 
Accordingly, 
IT IS ORDERED no later than September 16, 2024, the parties shall file a joint 
statement outlining what additional discovery or proceedings are needed. 
IT IS FURTHER ORDERED the Motion to Strike (Doc. 490) is DENIED. 
 Dated this 15th day of August, 2024. 
 
 
 
Honorable Roslyn O. Silver 
Senior United States District Judge 
 
 

Passage view · GavelSight