April 24, 2023
Retail display maker Triad Manufacturing and employee stock ownership plan trustee GreatBanc agreed to a $14.8 million deal to end a lawsuit from workers claiming they were overcharged for Triad stock, teeing up an end to a court battle that the Seventh Circuit refused to kick to arbitration.
Proposed class representatives James Smith and Jerry Honse on Thursday asked an Illinois federal judge for preliminary approval on the deal reached with Triad Manufacturing Inc. and the ESOP’s trustee, GreatBanc Trust Co. The deal, if approved, would resolve the suit claiming the trustee prompted the ESOP to purchase company shares through a $106 million deal after Triad failed to find an external buyer.
“The settlement provides substantial economic benefit to the class,” the workers said. “The settlement provides approximately $14.8 million of economic value to the ESOP by increasing the value of the ESOP’s Triad stock — and thereby the value of class members’ individual accounts in the ESOP.”
The workers filed the proposed class action against GreatBanc and Triad — which designs, manufactures and distributes retail display fixtures — in March 2020. They said that when the company failed to find a buyer for the business, it turned to the ESOP and sold 1.83 million shares of Triad’s common stock to the plan in a $106 million deal.
The lower court, and then the Seventh Circuit, denied the company’s push to force the Employee Retirement Income Security Act suit into arbitration. The appeals court held in September 2021 that the arbitration agreement the company relied upon improperly blocked relief provided by ERISA.
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The workers are represented by Michelle C. Yau, Daniel R. Sutter, Caroline E. Bressman and Carol V. Gilden of Cohen Milstein Sellers & Toll PLLC and by Nina Wasow and Dan Feinberg of Feinberg Jackson Worthman & Wasow LLP.
Read the complete story on Law360.