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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.
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