Corder

INTRODUCTION

Bruce and Betty Chadwick, Dean and Lorna Corder.(the “Beneficiaries”), Baugh Construction and Engineering Company Profit Sharing Plan (the “Plan”), and Gary Baugh appeal the district court’s award of attorney’s fees to Howard Johnson & Company (“Howard Johnson & Co.”). The attorney’s fees at issue were awarded under 29 U.S-.C. § 1132(g)(1) of the Employee Retirement Income Security Act (“ERISA”) after the Plan’s and the Beneficiaries’ unsuccessful ERISA action against Howard Johnson & Co. We have jurisdiction under 28 U.S.C. § 1291 . We reverse and remand in part.

BACKGROUND

Baugh Construction and Engineering Company (“Baugh Construction”) formed the Plan in 1971 for its salaried employees. Gary Baugh, the president of Baugh Construction, also served as the Plan’s administrator and one of its two trustees. 1 The Plan’s trustees employed Howard Johnson & Co. as an ERISA consultant and advisor. In 1978, the Plan began a series of real estate investments in-Alaska that greatly reduced the diversification of its investments; by 1986, almost 68% of the Plan was invested in Alaska real estate. Then, in the mid-1980s, Alaska’s real estate market collapsed, and the value…