Argent Trust Co. violated the Employee Retirement Income Security Act when it led a Choate Construction Co. employee stock ownership plan to pay $198 million for $65 million worth of their company’s stock, a former Choate worker claimed Wednesday in a proposed class action.
Former Choate Construction employee Sharon Lee sued Argent and others in North Carolina federal court over a 2016 deal in which the Choate Construction Co. employee stock ownership plan paid $198 million for 80% of the general contracting and construction management company. But Lee said participants in the plan like her lost out big in their retirement savings because the stock was only worth $64.8 million.
Had Argent done a proper investigation, it would have found that the valuation the deal was based on and the $198 million price tag “did not reflect the fair market value of the Choate stock purchased by the ESOP,” the suit claimed.
. . .
“Plaintiff Lee brought this lawsuit to vindicate the ERISA rights of current and former Choate Construction employees whose retirement accounts were used to purchase the company stock from the selling shareholders at an inflated price,” Michelle C. Yau, one of Lee’s attorneys, said in a statement.
The complete article can be accessed here.