Summary of the Lawsuit
This lawsuit, brought on behalf of participants and beneficiaries of the Choate Construction Company Employee Stock Ownership Plan (“ESOP”), alleges numerous violations of the Employee Retirement Income Security Act (“ERISA”) in connection with the sale of sale of Choate Construction Company stock to the ESOP for greater than fair market value.
A federal class action was filed in the United States District Court for the Eastern District of North Carolina (Lee v. Argent Trust Co., et al., Case No. 5:19-cv-00156) on April 17, 2019 against the Trustee Argent Trust Company, the Choate Construction Board of Directors, the Choate Construction ESOP Committee, the Selling Shareholders, and other individual defendants. The Complaint alleges that the executives/owners of the Company (the “Selling Shareholders”) created the ESOP in 2016 in order to sell their ownership interest in the Company to the ESOP/employees for $24.75 a share. The sale of stock in the Company to the ESOP for $24.75 per share occurred on December 13, 2016, which resulted in a total cost of $198 million for the ESOP. The ESOP borrowed $198 million to pay the Selling Shareholders for the stock. Two weeks after the sale of the Company to the ESOP/employees, the 8 million shares of stock were valued at $8.10 per share. This means that the stock lost two thirds of its value in just two weeks.
The claims in the Complaint against Defendants include prohibited transactions, breach of fiduciary duties, and failure to monitor.
Whom to Contact for More Information
If you are a participant in the Choate Construction Company, or if you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
Jamie Bowers, Esq., email@example.com
Dirk Hamel, Paralegal, firstname.lastname@example.org
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 (Toll Free) or 202-408-4600