Printer Workers Win Class Certification Against Segerdahl Corp.
Printer workers from Segerdahl Corp. won class certification for their claim executives of the company violated federal law when they sold the company for less than it was worth.
Judge Andrea Wood approved the class certification on June 16th, 2020, for allegations that the executives pocketed a large portion of the $265 million paid for the company. The allegations include executives keeping $110 million of the $265 million outside of the employee stock ownership payment pool, misusing the funds for executive bonuses and inappropriate stock right repurchases.
ERISA, or the Federal Employee Retirement Income Security Act, imposes strict duties on those responsible for administering retirement plan assets. Limiting fees and costs is one of the duties of the fiduciary, and allegations of $100m plus set aside for bonuses and other forms of executive compensation could violate ERISA.
February 2019 ESOP Lawsuit
The class representative Rush alleges that executives used control of the company to enrich themselves. Forms of the enrichment include moving money to insiders of the deal, creating excessive transactions bonuses for executives and insiders, and excessive payments for stock appreciations rights.
Additionally, the complaint alleges that the company was sold to an investment group that “paid less than fair market value of the ESOPs shares”. From the complaint:
“Instead of taking reasonable steps to market the ESOP’s shares in order to find a buyer that would pay the highest price, the Segerdahl defendants limited their efforts to finding a buyer that, after the transaction closed, would allow the Segerdahl defendants to maintain control over the company’s day to day operations, and likely remain at their jobs much longer than would a competitor”
Segerdahl Corp. History
The Segerdahl Corp., now referring to itself as SG360, is a printing company that specializes in digital pre-press, finishing and shipping services for marketing and advertising departments and agencies. They are headquartered in Wheeling, Illinois and have been in business since February 1956.
The class action lawsuit was filed in Segerdahl’s home state of Illinois, in the Illinois Northern District.
ERISA Class Action
Schneider Wallace has represented many classes of workers and investors in ERISA class actions. Workers expect fiduciaries of their retirement funds to use sound judgement in making investment decisions, including working for the best interest of the worker and not executives, insiders, or themselves.
A class action allows participants, who have lost money due to excessive fees or imprudent investments, to bring a cause of action against the fiduciaries of a plan, and others. ERISA litigation is ideally served through the class action process because participants are almost always in similar positions and have suffered the same types of damages arising from the same wrongdoing.
By filing as a class, the lawyers can focus discovery and case preparations on key issues that affect multiple participants and return money to all members of the plan. Contact one of our offices to schedule an appointment with our experienced class action lawyers.