Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
By Jacklyn Wille
Jan. 27 — The owners of a Florida chemical supply wholesaler sold company stock to their employee stock ownership plan at a price that was nearly double fair market value, the Department of Labor alleged in a new lawsuit.
According to the department, David J. Pilger and William M. Pilger relied on a faulty valuation when they sold 100 percent of Commodity Control Corp.'s stock to the ESOP for $9.1 million. In the course of the transaction, the Pilgers failed to meaningfully review the appraiser's conclusions and to ensure the appraiser had accurate and complete financial data, the department alleged.
This move benefited the Pilgers—who were “looking into how to divest themselves of their ownership stake in the Company and exit from the business”—at the expense of the ESOP's 62 participants, the department contended.
Moreover, the Pilgers “lacked understanding” of the mechanics behind the valuation process, which the department said “contained numerous flaws” and “grossly inflated the value of the company's shares.”
Based on these allegations, the department asked the U.S. District Court for the Southern District of Florida to hold the Pilgers liable under the Employee Retirement Income Security Act and order them to restore losses to the company's ESOP.
The complaint was filed Jan. 20.
To contact the reporter on this story: Jacklyn Wille in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)