Employee Benefits, ESOPs & Executive Compensation Law
DOL Brings Complaint Against ESOP in Illinois July 17, 2019, 3:00 PM
On September 30, 2013, in accordance with a Master Agreement by and among Bradford Hammacher Group, Inc. (“BHG”), the Bradford Hammacher Group, Inc. ESOP (the “BHG ESOP”), the predecessor companies that became wholly-owned subsidiaries of BHG and that “develop, source, and market a wide variety of products[,] including gifts[,] . . . apparel, [and] electronics” (the “Predecessor Companies”), and the shareholders of the Predecessor Companies (the “Former Shareholders”), (i) the BHG ESOP was established; (ii) the BHG ESOP purchased 100% of the outstanding shares of BHG by executing a $100 million promissory note; and (iii) BHG “redeem[ed] or acquire[d] by merger ‘all of its issued and outstanding shares’ of BHG and the Predecessor Companies from the Former Shareholders,” and, in exchange, the Former Shareholders received $82.5 million in cash, $195.9 million in junior subordinated promissory notes (the “Seller Notes”), and 320,000 detachable warrants, which “represented 33.7% of BHG's equity on a fully-diluted basis.”
Court Rules on Motion in Iowa ESOP Case May 16, 2019, 9:23 PM
On April 30, 2019, the Court granted Defendant Bankers Trust Company of South Dakota’s (“Bankers Trust”) motion for summary judgment filed in Innis ex rel. Telligen, Inc. Employee Stock Ownership Plan v. Bankers Trust Company of South Dakota, a Southern District of Iowa case that relates to the Telligen, Inc. ESOP’s (the “Telligen ESOP”) December 31, 2013 purchase of 100% of the outstanding shares of Telligen, Inc., an Iowa health management company, for $37.5 million.
Former Employee Brings Complaint Against ESOP in North Carolina May 13, 2019, 9:21 PM
In 2016, Choate Construction Company (“Choate”), a Georgia-based provider of “general contracting and construction management services,” retained CSG Partners to provide advice regarding the proposed sale of Choate to an ESOP; at that time, 100% of Choate’s stock was owned by the Selling Shareholders, including William Choate, who was Choate’s President.
Former Employee Brings Complaint Against ESOP in Illinois February 14, 2019, 4:33 PM
In 2003, the Segerdahl Corporation ESOP (the “Segerdahl ESOP”) was established, and the Segerdahl ESOP purchased 100% of the outstanding shares of common stock of Segerdahl Corporation (“Segerdahl”), an Illinois-based direct mail printer that is the “largest company focused on medium and high volume direct mail printing,” from Segerdahl’s other owners.
Former Employee Brings Complaint Against ESOP in Florida December 13, 2018, 6:08 PM
On September 30, 2015, the Raydon Corporation ESOP (the “Raydon ESOP”) purchased 100% of the outstanding shares of Raydon Corporation (“Raydon”), a Florida-based military simulation training contractor, for $60.5 million.
Consent Judgment Entered Into in North Carolina ESOP Case September 20, 2018, 12:00 AM
On May 6, 2011, the Tobacco Rag Processors, Inc. ESOP (the “Tobacco Rag ESOP”) purchased 100% of the outstanding shares of Tobacco Rag Processors, Inc. (“Tobacco Rag”), a North Carolina corporation that manufactures and distributes tobacco for use by manufacturers of cigarettes and cigars.
Court Rules on Motion in Virginia ESOP Case July 16, 2018, 12:00 AM
On July 13, 2018, the Court denied the Secretary of Labor’s motion for reconsideration of the Court’s April 17, 2018 dismissal of Count IV of the Secretary’s January 17, 2017 First Amended Complaint filed in Acosta v. Vinoskey.
Court Rules on Motions in Virginia ESOP Case April 19, 2018, 12:00 AM
On April 17, 2018, the Court ruled on Defendants’ Daubert motions to exclude the Secretary of Labor’s expert’s testimony and the parties’ cross-motions for summary judgment filed in Acosta v. Vinoskey.
Consent Order Entered Into in Virginia ESOP Case October 02, 2017, 12:00 AM
On July 22, 2010, the BAT Masonry Company, Inc. ESOP (the “BAT ESOP”) purchased 100% (123,000) of the outstanding shares of BAT Masonry Company, Inc. (“BAT”), a Virginia corporation focused on masonry and construction work, for approximately $13.5 million.
Consent Order and Judgment Entered Into in New York ESOP Case July 27, 2017, 12:00 AM
On February 12, 2009, the Laser and Skin Surgery Center of New York ESOP (the “LSSCNY ESOP”) purchased 50.06% (i.e., 400,480) of the outstanding shares of the Laser and Skin Surgery Center of New York Management Corp. (“LSSCNY”), a New York corporation that operates a dermatological surgery center, for $24 million.