Summary of the Lawsuit
This lawsuit alleges that New England BioLabs violated the Employee Retirement Income Security Act of 1974 (“ERISA”) and that the fiduciaries of the New England Biolabs, Inc. Employee Stock Ownership Plan breached their fiduciary duties and caused the Plan to engage in prohibited transactions, by forcing the liquidation of the stock of former employees at share prices that were less than fair market value.
Summary of the Claims
The New England Biolabs, Inc. Employee Stock Ownership Plan is not actually an ESOP, but a profit sharing plan that holds four types of investments: (1) mutual funds, (2) pooled separate accounts, (3) New England Biolabs (“NEB”) stock and (4) Cell Signaling Technology (“CST”) stock. Both NEB and CST stock are privately held (i.e. they are not publicly traded) and require the appraisal from an outside valuation firm to determine the value.
The Third Party Complaint alleges that the 2019 Amendment caused former employees to have their accounts in the Plan liquidated for less than fair market value because the valuation reports on which the Trustees relied contained numerous errors. In addition, the Counterclaim alleges that NEB failed to update the SPD for over 15 years and failed to disclose important changes to the terms of the Plan.
Class Action Allegations
This lawsuit is brought on behalf of the following persons:
All persons who are former employees of New England Biolabs and who are or were participants in the New England BioLabs Employee Stock Ownership Plan and whose accounts were liquidated on or after September 30, 2016 through the date of judgment and the beneficiaries of such participants.
Excluded from the Class are (a) the Third-Party Defendants, (b) officers and directors of NEB, (c) other persons who had decision-making or administrative authority relating to the administration, modification, funding or interpretation of the Plan, (d) the beneficiaries of such persons or the immediate family members of any of the foregoing excluded persons, and (e) the legal representatives, successors and assigns of any such excluded persons.
Status of the Litigation
The Counterclaim Complaint was filed on February 16, 2021 and the Third Party Complaint was filed on March 25, 2021. New England Biolabs, Inc. and the Third Party Defendants moved to dismiss the Counterclaim Complaint and the Third Party Complaint on April 16, 2021. On May 26, 2021, the Court granted the Motion to Dismiss on Counts I, III, and IV of the Counterclaim and Counts I, II, and III of the Third Party Complaint but denied it on Counts VI, VII, and VIII of the Counterclaim and Counts IV, V, and VI of the Third Party Complaint. However, the Court allowed Miller until July 8, 2021 to file an amended Counterclaim and Third Party Complaint. Miller filed a request to amend the Counterclaim and Third Party Complaint, which is currently pending.
Discovery is ongoing.
Whom to Contact for More Information
If you area member of the proposed class or you have information which might assist using the prosecution of these allegations, please contact one of the following persons:
R. Joseph Barton, Esq. (email@example.com)
Colin M. Downes, Esq. (firstname.lastname@example.org)
Ming Siegel, Paralegal (email@example.com)
Block & Leviton LLP
1735 20th Street NW
Washington, DC 20009
Block& Leviton is co-counsel in this litigation with Jonathan M. Feigenbaum, Esquire.