On December 5, 2018, Plaintiff Stephanie Woznicki filed a class action in the United States District Court for the Middle District of Florida in Orlando against Raydon Corporation, as well as Donald K. Ariel, David P. Donovan, the ESOP Committee of the Raydon Corporation Employee Stock Ownership Plan and Lubbock National Bank under the Employee Retirement Income Security Act of 1974 (“ERISA”) on behalf of herself and a class of participants in, and beneficiaries of, the Raydon Corporation Employee Stock Ownership Plan (“the ESOP” or “the Plan”) to restore losses to the Plan.
These claims arise out of a transaction on September 30, 2015 in which Defendants Donald K. Ariel and David P. Donovan sold 100% of the stock of Raydon Corporation (“the September 2015 ESOP Transaction”) to the ESOP for $60,500,000, and alleged subsequent breaches by the fiduciaries of the ESOP. The ESOP’s stock was valued by Lubbock National Bank at only $4,550,000 as of December 31, 2017.
Plaintiff alleges that the Transaction was not designed to be in the best interests of the ESOP participants; the selling shareholders failed to disclose material information to the Trustee, Defendant Lubbock National Bank, about the loss of a key contract; and Defendant Lubbock National Bank failed to perform adequate due diligence and caused the ESOP to pay in excess of fair market value. As a result of alleged violations of ERISA’s fiduciary rules by the fiduciaries entrusted with their Plan, Plaintiff and other ESOP participants and beneficiaries allege they have not received all of the hard-earned retirement benefits or the loyal and prudent management of the ESOP to which they are entitled.
The Putative Class Action Complaint can be downloaded here. This has been covered by Bloomberg Law News and Law 360.
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Plaintiff is represented by Dan Feinberg (Feinberg, Jackson, Worthman & Wasow LLP) who can be reached at (510) 269-7998, R. Joseph Barton (Block & Leviton LLP) who can be reached at (202) 734-7046, and Sam Smith and Loren Donnell (Burr & Smith LLP) who can be reached at (813) 253-2010.