Engstrom Lee

04/07/2025

Plan fiduciaries have been accused of failing to prudently invest cash held in employee stock ownership plan trusts in recent cases.

01/15/2025

"The plan has been invested in the same GIBC stable value product since 1999, and the lawsuit alleged that the plan has lost more than $11.4 million from 2019 to 2023 due to investing in this product. . . . [T]he plaintiffs are asking the court to declare that Sentara breached its fiduciary duties under the Employee Retirement Income Security Act, replace its committee members and make good on plan losses, among other requests."

Its 403(b) plan committee was accused of failing to monitor its investment in a stable value investment product offered by Principal.

01/14/2025

https://news.bloomberglaw.com/employee-benefits/sentara-health-sued-over-retirement-plans-stable-value-fund

Hospital system Sentara Health was hit with a proposed class action saying the retirement plan covering its workforce offers a poorly performing and imprudent stable value fund.

07/31/2024

We are glad the Court recognized our clients lost retirement savings as a result of the pension trustees' misconduct. We look forward to getting right into discovery to understand the full scope of their wrongdoing.

The Ninth Circuit revived a suit by carpenters alleging union pension trustees broke federal benefits law by investing retirement plan assets in dicey index funds that lost over $250 million in the 2020 market downturn, finding Tuesday that the workers' mismanagement claims should proceed to discove...

05/31/2024

“It’s hard to defend a strategy of holding a material amount of assets in cash during that period of time given the rates of return,” Engstrom said. “Losing your purchasing power consistently over time isn’t hedging—that’s actually just losing money.”

A handful of new lawsuits challenging employee stock ownership plans with significant cash holdings could force courts to grapple with the differences between traditional retirement plans and those aimed at giving workers an ownership stake in their companies.

05/09/2024

We just sued Pride Mobility Products Corp. on behalf of ESOP participants for mismanaging the Plan's investments. Our investigation is ongoing. If you currently have an account with the ESOP and would like to get involved or learn more, visit engstromlee.com/pridemobility

A scooter company violated federal benefits law by putting too much of workers' retirement funds into investments that produced meager returns and causing its employee stock ownership plan to lose out on about $3.3 million since 2018, a proposed class action filed in Pennsylvania federal court said.

05/08/2024

According to the lawsuit filed April 24 in federal court in Pittsburgh, the former employees didn’t actually lose money, but believe they could have earned a lot more if it wasn’t all sitting in cash investments earning an average 1.46%. They allege that the employee stock option plan, or ESOP, earned $778,539 from its cash investments between June 2018 and June 2023, while the plan would have earned ten times more — around $7.7 million over the same time — if the money had been placed in an index fund tracking the S&P 500.

The stock market wasn’t just breaking records from June 2018 to June 2023 — it was shattering them like a bull in a china shop. Meanwhile,...

05/02/2024

https://news.bloomberglaw.com/employee-benefits/aerotech-sued-over-low-yield-investments-in-employee-stock-plan

Three former Aerotech Inc. workers filed a proposed class action saying their employee stock ownership plan was mismanaged because it parked too much money in cash-like investments that paid paltry returns.

03/28/2024

We've asked the court to approve a $19 million settlement on behalf of a class of participants in the ADG ESOP. To learn more about this case and settlement, visit engstromlee.com/adg

A participant in Advanced Diagnostic Group’s employee stock plan announced a $19 million class settlement in a lawsuit saying company executives, GreatBanc Trust Co., and partners at a private finance firm drained the plan’s value for personal benefit.

03/23/2024

"In a 37-page opinion Wednesday, U.S. District Judge Victoria Marie Calvert denied a motion to compel arbitration from two executives of a360inc, A360 Holdings LLC and Argent Trust Co., which served as the ESOP's trustee. Five ESOP participants filed the Employee Retirement Income Security Act lawsuit in September 2022, alleging a360inc bought nearly 883,000 shares back from the ESOP at $30 per share even though the company was valued at $70 per share."

To learn more about this case, visit engstromlee.com/a360

A legal technology company's executives and related entities can't arbitrate a proposed class action alleging they undervalued the company's shares when shutting down its employee stock ownership plan, thereby costing participants $35.4 million, a Georgia federal judge ruled, finding the plan's arbi...

02/28/2024

We have asked the court to preliminarily approve a $1.1 million settlement in this case. If you participated in the Electric Supply ESOP, left the company, and have since moved residences, please visit our case page, engstromlee.com/electricsupply, to provide an updated mailing address and contact information so that you can stay up to date about this class action

02/27/2024

We are pleased the Court is allowing our federal claims on behalf of Russelectric workers to proceed and look forward to continue fighting for our clients' hard-earned retirement savings.

Former employees of Massachusetts power control systems manufacturer Russelectric Inc. advanced a lawsuit saying their employee stock ownership plan was raided of value by the company founder’s children after his death.