January 5, 2024
California’s top design-build multifamily plumbing subcontractor allegedly sells out employees in illegal $247 million ESOP transaction
Washington, DC – Cohen Milstein Sellers & Toll PLLC, a premier plaintiffs’ law firm, filed a class action on behalf of employees and participants of the AMPAM Parks Mechanical, Inc. Employee Stock Ownership Plan (ESOP). The lawsuit is against AMPAM Parks Mechanical, the founders of AMPAM, Buddy Parks, John D. Parks, James Parks, and Jason Parks (“the Parks brothers”), and Neil Brozen, for violations of the Employee Retirement Income Security Act (ERISA). AMPAM Parks Mechanical has stated that it is California’s largest multifamily plumbing subcontractor, employing approximately 1,000 employees throughout the greater Los Angeles, San Diego, and Northern California areas.
Allegedly, the Parks brothers created the AMPAM ESOP, a retirement plan, to purchase their interest in AMPAM at an inflated price of $247 million. To obtain the $247 million purchase price in the ESOP Transaction, AMPAM (controlled by the Parks brothers), hired Neil Brozen, president of Ventura Trust, a trust company doing business in Minnesota, to approve the purchase price of $247 million on behalf of the ESOP. There are multiple lawsuits pending against Neil Brozen for violations of ERISA, including a lawsuit filed by the Secretary of Labor and other class actions filed by employees of other ESOPs.
The suit further alleges that neither the Parks brothers nor Neil Brozen involved AMPAM employees in the determination of the price the ESOP would pay or the other terms of the Transaction. Rather, AMPAM employees found out about the purchase of AMPAM from the Parks brothers only after the ESOP transaction was complete. Thereafter, all AMPAM’s employees were allegedly forced to buy AMPAM stock from the Parks brothers through their ESOP retirement accounts.
Shortly after the sale, AMPAM’s stock held by the ESOP was reported to be valued at $17,821,310, or approximately 7% of what the ESOP had paid for the company. Thereafter, the company’s value plummeted, resulting in a valuation of a mere $2.1 million, less than 1% of what the Plan paid.
“This lawsuit seeks to protect the hard-working employees and retirees of AMPAM. Our complaint alleges that the 2019 sale of AMPAM to the ESOP for $247 million was overpriced and unfair to workers. We look forward to vindicating the rights of our client and other class members,” said Michelle C. Yau, chair of Cohen Milstein’s Employee Benefits/ERISA practice.
The lawsuit,Barrios, et al. v. AMPAM Parks Mechanical, Inc., et al., was filed before the United States District Court for the Southern District of California on December 28, 2023.
Cohen Milstein is actively signing up AMPAM employees or retirees who may have been impacted by the alleged illegal transaction to potentially participate in the lawsuit. Participants need to have been employed by AMPAM Parks Mechanical after July 2019. PLEASE CLICK HERE FOR THE CASE CONTACT FORM.
Press Contact:
Michelle C. Yau, chair of Cohen Milstein’s Employee Benefits/ERISA practice, has decades of experience protecting retirement assets and insight into complex financial transactions and actuarial issues informed by her Wall Street and Department of Labor experience. In 2021, she was named Law360’s “Employee Benefits MVP – Benefits.” Tel. 202-408-4600, Email: myau@cohenmilstein.com
Attorney Contacts:
The following Cohen Milstein attorneys are currently engaged in Barrios, et al. v. AMPAM Parks Mechanical, Inc., et al. and can respond to questions.
Michelle C. Yau, chair of the Cohen Milstein’s Employee Benefits/ERISA practice, is licensed to practice in Massachusetts and the District of Columbia. Her practice is limited to federal legal matters, such as ERISA that pertains to the lawsuit against AMPAM. Tel. 202-408-4600, email: myau@cohenmilstein.com
Eleanor Frischis an associate in Cohen Milstein’s Employee Benefits/ERISA practice. She is licensed to practice in California and Minnesota. Tel. 612.807.1575, email: efrisch@cohenmilstein.com
Ryan Wheeler is an associate at Cohen Milstein and a member of the Employee Benefits practice. He is licensed to practice in California and the District of Columbia. Tel. 202.408.4600, email: rwheeler@cohenmilstein.com
Jacob Schutz is an associate at Cohen Milstein and a member of the Employee Benefits practice. He is licensed to practice in Minnesota. Tel. 612.807.1575, email: jschutz@cohenmilstein.com
About Cohen Milstein’s Employee Benefits/ ERISA Practice
Cohen Milstein Sellers & Toll PLLC is a premier class action law firm, handling high-profile and often precedent-setting cases on behalf of plaintiffs. Under Michelle Yau’s leadership, Cohen Milstein was named Law360’s “Employee Benefits/ERISA Practice Group of the Year” in 2019, 2021 and 2022. For additional information, please visit https://cohenmilstein.com or call (202) 408-4600.
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