This is the property of the Daily Journal Corporation and fully protected by copyright. It is made available only to Daily Journal subscribers for personal or collaborative purposes and may not be distributed, reproduced, modified, stored or transferred without written permission. Please click "Reprint" to order presentation-ready copies to distribute to clients or use in commercial marketing materials or for permission to post on a website. and copyright (showing year of publication) at the bottom.

Labor Law
ERISA
Employee Stock Ownership Plan

Richard Wool and Alan Mayer, on behalf of the Sitrick and Company Employee Stock Ownership Plan v. Michael S. Sitrick and Nancy Sitrick, husband and wife; The Michael and Nancy Sitrick Trust, as trust; Reliance Trust Company, a Georgia corporation; Sitrick and Company Inc., a California corporation

Published: Dec. 31, 2011 | Result Date: Nov. 30, 2011 | Filing Date: Jan. 1, 1900 |

Case number: 2:2010-cv-02741 Settlement –  $6,250,000

Court

USDC Central


Attorneys

Plaintiff

Michael D. Braun
(Braun Law Group PC)

Derek W. Loeser
(Keller Rohrback LLP)

Gary D. Greenwald

Juli E. Farris
(Keller Rohrback LLP)

Gary A. Gotto


Defendant

Matthew J. Pearce

Shelly Gopaul

Anthony B. Daye

Paul Flum

W. Bard Brockman

Connie M. Anderson
(Lewis, Brisbois, Bisgaard & Smith LLP)

Gregory A. Garbacz

Keith D. Klein
(Bryan, Cave, Leighton & Paisner LLP)

James J. Brosnahan
(Morrison & Foerster LLP)


Facts

Michael Sitrick is the founder and CEO of Sitrick and Co. Inc. Richard Wool and Allan Mayer are former employees of Sitrick and had interests in the Sitrick Employees Stock Ownership Plan, a retirement fund. On behalf of the plan, Wool and Mayer sued Sitrick, Sitrick and Co. Inc., and Reliance Trust Company, which was the independent trustee of the ESOP.

Contentions

PLAINTIFFS' CONTENTIONS:
Plaintiffs claimed that the defendants breached their fiduciary duty under ERISA and that the amount that Sitrick and Company paid to repurchase the ESOP's shares in 2008 was inadequate.

DEFENDANTS' CONTENTIONS:
All defendants denied any wrongdoing. In addition, Sitrick contended that he properly relied on Reliance's determination, based on the work of an independent valuation firm, that the price paid to repurchase the ESOP's shares was fair.

Result

The parties agreed to settle for $6.25 million.

Other Information

The settlement was fully executed by the parties on November 30, 2011. The settlement is conditioned on court approval. A preliminary approval hearing is scheduled for January 23, 2012. At that time, and assuming the court grants preliminary approval, the court will set a date for the final approval hearing.


#95022

For reprint rights or to order a copy of your photo:

Email jeremy@reprintpros.com for prices.
Direct dial: 949-702-5390