Darleen Stanton v. Clair R. Couturier Jr., David R. Johanson, Robert E. Eddy, Johanson Berenson LLP, Pensco Inc., Employee Ownership Holding Company Inc., Employee Stock Ownership Plan, Noll Manufacturing Company and N & NW Manufacturing Holding Company Inc.
Published: Apr. 17, 2010 | Result Date: Mar. 12, 2010 | Filing Date: Jan. 1, 1900 |Case number: 2:05-cv-02046-RRB-GGH Settlement – $10,800,000
Court
USDC Northern
Attorneys
Plaintiff
Defendant
Christopher Carrillo
(Law Office of Christopher M. Carrillo)
Matthew R. Jacobs
(CalPers Legal Office)
Facts
In 2005, employees of the Employee Ownership Holding Co. (EOH), which owned Noll Manufacturing Co. and two other manufacturing plants, filed a representative claim against former officials of EOH. The officials were Clair R. Couturier, former president and chief executive; David R. Johanson, attorney and former company general counsel; Johanson's firm, Johanson Berenson LLP; Robert E. Eddy, holding company president; James Roorda, a Riverside accountant; David Heald and his firm, Consulting Fiduciaries Inc., and Matthew Donnelly, a principal of the Business Appraisal Institute. In 2007, EOH was sold for $65 million. In 2008, the former officials were charged by the Labor Department with allegedly violating the Employee Retirement Income Security Act.
Contentions
PLAINTIFF'S CONTENTIONS:
Plaintiffs alleged that, in 2004, EOH paid Couturier $26 million in cash to settle his compensation interests, with Eddy's approval. Plaintiffs also alleged that the company purchased a home for Couturier and provided $2.7 million to cover property tax. Plaintiffs further alleged that Couturier was granted, in 2001, synthetic equity interests in the company, which had grown as the company increased in value. Plaintiffs contended that potential aquirors of the company had offered Couturier $34 million to buy his interest. Furthermore, plaintiffs alleged, after the 2007 sale of the company, the officials improperly withheld the proceeds to fund their legal defense or a possible settlement for the employees' class action suit.
Result
Defendants settled with the employees and the Labor Department. Under the agreement, defendants were required to surrender $8.8 million, a golf course residence in Palm Desert and its contents, worth near $3.5 million and filed an amended return seeking a refund of approximately $2 million in taxes paid by the company on the transfers. The tax refund claim is contingent upon the IRS' position or acquiescence.
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390