The lawsuit alleges that Raydon Corporation and other fiduciaries of the Raydon Corporation Employee Stock Ownership Plan (“the ESOP” or “the Plan”) violated the Employee Retirement Income Security Act of 1974 (“ERISA”) by breaching their fiduciary duties with respect to the September 30, 2015 transaction in which 100% of Raydon stock was sold to the ESOP.
The Complaint alleges that Defendants Donald K. Ariel and David P. Donovan breached their fiduciary duties when they sold 100% of the stock of Raydon Corporation on September 30, 2015 to the ESOP for $60,500,000. Lubbock National Bank had valued the ESOP’s stock at only $4,550,000 as of December 31, 2017.
The Complaint alleges that the transaction was not made to be in the best interests of the ESOP participants; the selling shareholders failed to disclosure 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 these alleged ERISA violations, 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.
This lawsuit was certified as a Class consisting of the following persons:
All participants in the Raydon Corporation ESOP from September 30, 2015 or any time thereafter who vested under the terms of the Plan and those participants’ beneficiaries.
Excluded from the Class are Defendants and their immediate family, any fiduciary of the Plan; the officers and directors of Adams and Associates or of any entity in which a Defendant has a controlling interest; and legal representatives, successors, and assigns of any such excluded persons.
The Complaint was filed on December 5, 2018. The Amended Complaint was filed on April 23, 2019. Defendants filed motions to dismiss on May 28, 2019, which were denied in part and granted in part on November 4, 2019.
Plaintiff filed a Motion for Class Certification on June 27, 2019, which the Court granted on March 16, 2020.
Plaintiff and all Defendants agreed to a settlement in this case, and moved for its preliminary approval on August 26, 2020. Under the settlement, Defendants agreed to pay $2.4 million to resolve all the claims of the class. After subtracting the court-approved attorneys’ fees and costs and class representative service award, the remaining amount of the $2.4 million settlement fund will be distributed to the participant class members and beneficiaries who would be entitled to payment under the terms of the Plan.
The Court granted preliminary approval of the settlement on October 26, 2021. Formal notice of the settlement was mailed to class members on November 16, 2021. The Court set December 15, 2021 as the deadline for Plaintiff to file any motion for attorneys’ fees and costs and January 25, 2022 as the deadline for Plaintiff to file the motion for final approval of the settlement. A final fairness hearing will be held on February 17, 2022 at 1 p.m.
Class members have until December 31, 2021 to file challenges to his or her ESOP account data or to file an objection to the settlement or Plaintiff’s motion for attorneys’ fees and costs.
For additional information about the settlement, please visit www.raydonesopsettlement.com.
If you are a member of the proposed class and have questions about the settlement or would like to update your contact information, please contact the Settlement Administrator:
Settlement Administrator for
Raydon ESOP Settlement
c/o CPT Group, Inc.
50 Corporate Park
Irvine, CA 92606
1 (888) 464-0271
If you have questions about the allegations in the lawsuit, please contact one of the following persons:
R. Joseph Barton, Esq. (email@example.com)
Colin Downes, Esq. (firstname.lastname@example.org)
Ming Siegel, Paralegal (email@example.com)
Block & Leviton LLP
1633 Connecticut Ave. NW, Suite 200
Washington DC 20009
Block & Leviton is co-counsel in this litigation with Feinberg Jackson Worthman & Wasow LLP and Burr & Smith LLP.
Contact our attorneys for a no-cost case evaluation.