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)
Juli E. Farris
(Keller Rohrback LLP)
Defendant
Connie M. Anderson
(Lewis, Brisbois, Bisgaard & Smith LLP)
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.
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