BG ESOP Lawsuit Noted in New York Times Article

The New York Times reported on a lawsuit filed by Bailey Glasser. The article, titled “He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement” (Saturday, February 10, 2024), details a debt settlement operation run by Ryan Sasson (the stepson of Stephen Drescher, a close associate of Jordan Belfort, the self-proclaimed “Wolf of Wall Street”) across several states and involving various entities and law firms – and even shoe designer Steve Madden – now facing serious civil fraud changes brought by the Consumer Financial Protection Bureau and the attorneys general of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina and Wisconsin.

To cash out his stake in the company before the regulators pounced, Sasson sold the company to “to its employees, through a financial transaction known as an ESOP (Employee Stock Ownership Plan). The deal valued the company at $242 million. Mr. Sasson described the transaction as something of a gift to the employees — ‘our Strategic family,’ he called them — who had built the company. Mr. Sasson had, effectively, cashed out. His employees now owed 100 percent of Strategic.”

Bailey Glasser’s highly experienced ESOP team filed a lawsuit challenging the fair market value of the $242 million ESOP transaction, which the Times linked to in its article. In 2019, the ESOP trust allowed Sasson and others to reap an additional $104.5 million from the ESOP, supposedly because the company met certain targets. Sasson and the other defendants are trying to move the lawsuit to a secret arbitration proceeding and limit the damages to a fraction of the excess money paid to Sasson and others. A decision from the Second Circuit Court of Appeals on that issue is forthcoming.

Our award-winning and nationally ranked ERISA/ESOP team has deep experience in handling matters such as the one described by the New York Time article and has recovered hundreds of millions of dollars on behalf of employees and retirees. To learn more about our ERISA group visit here.

To read the New York Time article, visit here

Law360 Covers ERISA Team’s Win Over Attempted Motion to Dismiss

Bailey Glasser’s ERISA team achieved another litigation win in the fight to protect employee retirement funds. In an order issued Tuesday, a North Carolina federal judge denied industrial refrigeration company, Morris & Associates’ motion to dismiss former CEO Bryan John’s ERISA case that alleged the company mismanaged an employee stock ownership plan by grossly undervaluing the business.

According to a Law360 article covering the ruling, the court found that the plaintiff could still sue on behalf of the plan even if he’s no longer a trustee because he is still a plan participant.

Bailey Glasser partner Mark Boyko, who is representing Mr. Johns, told Law360 he is “looking forward to seeing the case resolved on the merits.”

Originally filed in June, the lawsuit against Morris & Associates and nine ESOP trustees, alleged that the family company’s patriarch used the company and the plan to benefit himself and his family by undervaluing the company and issuing bonuses and high salaries not approved by the ESOP trustees, which hurt employee shares.

In addition to Boyko, the plaintiff is represented by Bailey Glasser partner Gregory Porter, associate Laura Babiak, as well as attorneys from Tuggle Duggins PA.

Read the full Law360 article here.

To learn more about our ERISA, Employee Benefits & Trust Litigation practice, please visit here.
#ERISA #ESOP #BaileyGlasser

ERISA Partner Mark Boyko Quoted in Law360 on 401(k) Forfeiture Case

Bailey Glasser partner Mark Boyko was quoted in the Law360 article, “3 Arguments, Hearing Benefits Attys Should Watch in Feb.,” commenting on the significance of a new theory of liability under ERISA against Clorox Co. in a California federal court. The case challenges the company’s use of 401(k) forfeitures, created when employees leave before fully vesting, to offset corporate contributions into the plan.

“The two main issues in the case involve the plaintiffs’ standing and industry practice of how to treat 401(k) plan forfeitures,” Mark said. “A decision for defendants on standing or for plaintiffs on the merits would have meaningful consequences that sweep beyond the case itself.” Read the full article here.

Mark is a pioneer in ERISA class action litigation and represents 401(k) plan participants alleging breach of fiduciary duties by their employers and has secured judgments and settlements in this area exceeding $500 million. Learn more about his experience here.

#ERISA #ClassActions #EmployeeBenefits #BaileyGlasser

BG Defeats Attempt to Dismiss Federal Class Action ESOP Lawsuit

Another win on behalf of protecting company employees’ hard-earned money: today, our ERISA team defeated a motion to dismiss that challenged a class action brought on behalf of a class of investors in the Churchill Holdings, Inc. Employee Stock Option Plan where we alleged that the trustees breached their fiduciary duties and engaged in prohibited transactions in violation of ERISA law.

The federal court in Arnold v. Parades (filed in the Middle District of Tennessee), rejected virtually every argument made by defendants. Judge Crenshaw held that the plaintiffs’ individual releases did not bar them from suing on behalf of their ESOP, that the plan’s class action waiver was unenforceable because it prevented effective vindication of statutory rights and violated ERISA’s anti-exculpatory provision, section 410, and that plaintiffs adequately alleged breaches of fiduciary duty and prohibited transactions. Plaintiffs are challenging the fair market value of the stock determination made by the trustee when it terminated the Churchill Holdings, Inc. ESOP.

The Bailey Glasser team includes partner and ERISA Practice Group Leader Greg Porter, partners Mark Boyko, Ryan Jenny, and Patrick Muench, and associate Laura Babiak. Our ERISA team is a leader in protecting ERISA and ESOP plans, and is ranked nationally by Chambers & Partners and Best Law Firms, with Greg Porter also being ranked Band One in ERISA Litigation, Mainly Plaintiffs – USA-Nationwide. For more about our ERISA work, please visit here.

To read the Court’s opinion, visit this link.

ERISA Partner Patrick Muench a Panelist on ABA ERISA Litigation Virtual Webinar

Join Bailey Glasser Partner Patrick Muench December 12, 2023, at 1pm EST for a virtual webinar discussion on ERISA litigation involving Employee Stock Ownership Plans (“ESOPs”) hosted by the American Bar Association’s Joint Committee on Employee Benefits. This event will include a review of some common areas of dispute in ESOP cases and a summary of trends and recent court decisions.

Patrick litigates complex commercial cases with emphasis on ERISA, antitrust, and oil and gas disputes. He handles all aspects of these matters from discovery through trial. His experience includes winning a $30 million trial judgment in Brundle v. Wilmington Trust, a case involving breaches of duty by a trustee and complex valuations in an ESOP transaction. Learn more about Patrick Muench here.

To register and learn about CLE credits for this event, visit this link.

#BaileyGlasser #ERISA #ABA #EmployeeBenefits

42 Bailey Glasser Lawyers Named To The Best Lawyers in America & Best Lawyers: Ones To Watch 2024 Guides

Today we announce that 42 Bailey Glasser lawyers have been recognized across various categories (including one as a “Lawyer of the Year”) in the 30th edition of The Best Lawyers in America® and the fourth edition of Best Lawyers: Ones to Watch in America®.

“Lawyer of the Year” honors are awarded annually to only one lawyer per practice area in each region with extremely high overall feedback from their peers, making it an exceptional distinction.

For more, follow this link.

Bailey Glasser Awarded Top Rankings in Chambers USA 2023 and Achieves Nationwide Rankings in ERISA and Product Liability Litigation

Thank you to Chambers & Partners for our 2023 rankings, which includes two brand-new nationwide practice group rankings in the ERISA plaintiffs and Product Liability litigation categories. Having our lawyers and practice groups recognized by Chambers reflects how much we care about our clients and how hard we work to achieve successful outcomes for them.

We are grateful to all the clients and counsel (co-counsel as well as referring counsel) who took the time to participate in the process. Your time is valuable and we take that seriously. We appreciate you.

For a detailed overview of this year’s rankings, please visit here.

Partner Mark Boyko Quoted in Law360 on Significant Decision Denying Arbitration in Favor of ERISA Plaintiffs

Mark Boyko, partner and member of the Bailey Glasser ERISA practice group, was interviewed by Law360 on the biggest ERISA decisions so far in 2023. Boyko noted Harrison v. Envision Management Holding Inc. Board et al., a decision by the U.S. Court of Appeals for the Tenth Circuit, will have a far-reaching impact in protecting workers from abusive arbitration provisions designed to undermine their rights under ERISA.

In the interview with Law360, Mark Boyko said, “[The Tenth Circuit’s ruling] affirms the notion that a plan’s arbitration provision that waives a participant’s right to seek planwide relief is inconsistent with ERISA’s statutory right for that participant to obtain that same relief.” Boyko added that the decision “preserves the status quo by holding that the remedy limitation cannot be severed from the arbitration provision.”

The ruling has already been cited as ‘persuasive’ outside the Tenth Circuit, a sign of its importance in this developing area of law. #ERISA #Arbitration #ClassActions #BaileyGlasser

Read the full Law360 article here.

Partner Mark Boyko Quoted in Law 360 and Bloomberg Law

Bailey & Glasser, LLP partner and ERISA litigator Mark Boyko was quoted in Law360 and Bloomberg Law discussing a newly-issued federal 7th Circuit Court of Appeals ruling that may be beneficial to plaintiffs who must meet certain pleading standards to successfully pursue claims against retirement plans that breach their duties to make prudent investment decisions. As told to Bloomberg Law: “’That’s huge’, Boyko said, because a heightened pleading standard on a claim challenging recordkeeping fees would mean that a plan participant would have to do their own request for proposals for these services ‘long before filing their case.’ Instead, ‘it’s enough to show that other plans were able to get lower fees by taking steps plaintiffs plausibly allege the defendant could have done, and that other recordkeepers plausibly would have performed the same or comparable services for a lower price.'” Boyko and BG partner Gregory Porter are pioneers in this area and are currently litigating several cases across the country alleging employers imprudently managed the investments in their 401(k) plans.

To read the articles:

Law 360
Bloomberg Law

N.Y. Federal Judge Recommends Class Action Against Metropolitan Life Proceed

Bailey Glasser and co-counsel Robert Izard and Douglas Needham represent a pair of subclasses of Metropolitan Life Insurance Company whose pension benefits were unlawfully reduced using outdated mortality estimates. On March 20, 2023, a federal magistrate recommended that the claims proceed as a class action.

For more about the ruling, please visit here.

We look forward to the suit moving forward, as it was originally filed in 2018.

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