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Three former Southern Pan Services Co. workers are accusing the construction company of violating federal benefits law by failing to distribute their employee stock ownership plan accounts before the company became insolvent.
The former workers, who seek to represent hundreds of similarly situated individuals, allege they should have received a lump-sum payout after they turned 65 or five years after their respective termination dates, according to a lawsuit filed Jan. 24 in federal court in Georgia.
The lawsuit comes nearly two years after the financially struggling company became insolvent, dissolved itself, and announced that all shares in its retirement plan were worthless.
The workers allege the company, its successor, and its officers violated the Employee Retirement Income Security Act by failing to inform them about the plan’s financial status and wrongfully retaining millions of dollars belonging to the plan. They further request penalties for the company’s alleged failure to disclose certain plan documents.
Based in Lithonia, Ga., Southern Pan offered concrete formwork and turnkey frame constructions for commercial, residential, educational, health-care, and parking deck projects, according to company data in the Bloomberg Terminal.
By 2013, the company’s ESOP had more than $60 million in assets, the lawsuit said. In 2016, the company informed its employees that it was insolvent and that all shares in the ESOP were worthless, according to the lawsuit. Later that year, Southern Pan dissolved, but it didn’t terminate the plan. The company “reformed” itself as Southern Pan Structures LLC with the same principals, physical address, core business, clients, and employees, the lawsuit said. In 2017, the entity changed its name to American Structural Concrete LLC.
A company representative didn’t immediately respond to Bloomberg Law’s request for comment.
The Sharman Law Firm LLC and Daughtery Crawford & Brown LLP represent the workers.
The case is Askew v. S. Pan Emp. Stock Ownership Plan , N.D. Ga., No. 1:18-cv-00309-MHC, complaint filed 1/24/18 .
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