August 15, 2022

Workers for an animal feed manufacturer asked a California federal judge for class status in their suit alleging they were charged an inflated $244 million for their employer's stock just before its value plummeted because of a feed contamination scandal.

Three workers filed their request for class certification Thursday in the suit lodged against Kevin Kruse, owner of feed manufacturer Western Milling, and GreatBanc Trust Co., trustee of the employee stock ownership plan. The workers requested that their memorandum expressing the grounds for class certification be filed under seal.

In their motion, they said the class should include all workers and their beneficiaries who participated in the Western Milling employee stock ownership plan from Nov. 4, 2015. According to the initial complaint, nearly 400 workers are eligible for the suit.

The request stems from the February 2019 lawsuit Armando Zavala filed against Kruse, who operates the parent company of Western Milling, Kruse-Western Inc. Most of the claims survived a dismissal bid in December 2021.

Zavala, a former employee, said that the company violated the Employee Retirement Income Security Act when it sold the Kruse-Western stock to the newly established Western Milling employee stock ownership plan in 2015 for an inflated price of $244 million, which resulted in the loss of "tens of millions" for the stock ownership plan.

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The workers are represented by Daniel Feinberg, Nina Wasow and Andrea Obando of Feinberg Jackson Worthman & Wasow LLP and by Michelle C. Yau, Mary J. Bortscheller, Kai Richter and Laura E. Older of Cohen Milstein Sellers & Toll PLLC.

 

Read the article on Law360.