Judge Approves $13 Million Settlement to End Bradford Hammacher ESOP Lawsuit
On January 9, US District Judge Gary Feinerman granted preliminary approval to end a class action lawsuit against Reliance Trust Company for $13.4 million. The plaintiff, a participant in an employee stock ownership plan (ESOP) sponsored by Bradford Hammacher Group, Inc., his former employer, alleged that Reliance Trust, the ESOP’s trustee, violated the Employee Retirement Income Security Act (ERISA) when it caused the ESOP to purchase company stock at above fair market value in 2013. The lawsuit argued that Reliance Trust should be liable for the overpayment made by the ESOP to the previous shareholders.
According to the lawsuit, the ESOP paid $100 million to buy all of Bradford Hammacher’s stock, which was only worth $43.4 million at the time. Under the terms of the deal, Reliance Trust will deposit $12 million in cash into the ESOP, with three high-level Bradford Hammacher, Inc. affiliates contributing an additional $1.4 million to a separate settlement account. The full $13.4 million will be allocated among the eligible ESOP participants/class members.
Bailey Glasser lawyers Brian Glasser, Gregory Porter, Ryan Jenny, and Patrick Muench represented the plaintiff and class members in this case. Co-counsel included Mark Kindall, Robert A. Izard and Douglas P. Needham of Izard Kindall & Raabe LLP.