Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
The owner of a DirecTV installation company accused of mismanaging an ESOP must turn over three vehicles, including two Lexuses, to cover a multimillion-dollar judgment in favor of participants and the Labor Department ( Perez v. Bruister , 2017 BL 1608, S.D. Miss., No. 3:13-cv-1001-DPJ-FKB, 1/4/17 ).
Herbert C. Bruister must also cooperate with participants and the DOL in the sale of his multimillion-dollar life insurance policies, which he offered as security pending an appeal, Judge Daniel P. Jordan III of the U.S. District Court for the Southern District of Mississippi ruled Jan. 4. Bruister didn’t comply with a previous court order that granted his request to stay collection efforts by offering certain assets in security, the judge said. To permit Bruister to benefit from his failure to comply would be “patently unfair,” Jordan said.
The decision is the latest installment in a long-running case in which the trial court entered a $6.5 million judgment and a $3 million attorneys’ fees award against Bruister for causing the employee stock ownership plan to purchase his company stock at an inflated price.
In May, the U.S. Court of Appeals for the Fifth Circuit affirmed the judgment. Since then, the participants and the DOL have moved to secure Bruister’s assets to no avail, according to court documents. The judgment is subject to execution, and Bruister’s attempts to avoid the transfers make his prior offers look like “disingenuous delay tactics,” Jordan said, setting a 45-day deadline to satisfy the judgment.
Jordan rejected Bruister’s argument that requiring him to turn over the cars would “unnecessarily inconvenience” him and his wife and cause irreparable damage and harm. Bruister should have considered the inconvenience of lacking a vehicle before offering them as security, Jordan said.
Bruister declined to submit certain medical information required for the valuation of his life insurance policies, arguing that his privacy was protected under federal law. Jordan rejected this argument, holding that federal law doesn’t shield him from the participants’ request. As a result, Bruister was ordered to submit the necessary information to market and sell the policies.
Jordan declined Bruister’s request to reduce the multimillion-dollar judgment and to unfreeze his $41,000 bank account.
However, in a separate case, Bruister convinced Jordan to dismiss a fraud claim by ESOP participant Vincent Sealy, who also sued a fiduciary-liability insurer and law firm Jackson Lewis PC for their alleged violations of the Employee Retirement Income Security Act when they entered into a settlement agreement that affected the collection of the $6.5 million judgment.
The DOL represented itself. Watson & Norris PLLC and Keller Rohrback PLC represented the participants. Hawkins Parnell Thackston & Young LLP represented Bruister.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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 email@example.com.
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 firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)