On May 18, 2015, the U.S. District Court for the Southern District of New York granted final approval to the $11 million class action settlement of Gatto et al. v. Sentry Services, Inc. et al., No. 13-Civ.-5721-RMB (S.D.N.Y.). The settlement resolves claims involving the Sentry Services, Ltd. Employee Stock Ownership Plan (ESOP), including allegations that defendants concealed the existence of the ESOP from its participants. Plaintiffs had alleged that defendants concealed the ESOP to reap the tax and financial benefits of an ESOP, illegally retain for themselves the assets of the company, and prevent ESOP participants other than individual defendants from receiving any benefits from the ESOP.
The settlement, which the Court called an “excellent result for the class,” results in a settlement fund of $11,138,938, all of which will be allocated to the class members’ ESOP accounts. The settlement also provides other valuable relief for the class: the Defendant trustee of the ESOP was removed and replaced with an independent trustee, an independent and qualified valuation expert appraised the ESOP’s company stock, and the ESOP will be terminated, enabling class members to receive distribution of their benefits. The Court also approved class counsel’s request for attorneys’ fees and costs in its entirety. In addition to the settlement fund, Defendants will pay $725,000 in attorneys’ fees and costs, as well as settlement administration costs.