A lawsuit alleging Inland Seafood’s financial situation was misrepresented during a sale of the company to its employees in 2016 was dismissed on 5 December 2023.
US. District Court Judge Leigh Martin May ruled in favor of a motion by Inland Trustee James R. Urbach to dismiss the case on the grounds the plaintiffs did not fully pursue remedy of their problems with the employee stock ownership plan before filing suit.
The suit, filed 18 November, 2022, in the U.S. District Court for the Northern District of Georgia, accused Inland’s executive team of “massively inflating” the value of the company when it created a leveraged employee stock ownership plan in 2016 that is converting Inland into an employee-owned company. The lawsuit alleged their actions violated the Employee Retirement Income Security Act.
However, the plaintiffs did not attempt to pursue their claims through the administrative process outlined in the employee stock ownership plan before filing suit just two weeks before the six-year statue of limitations expired.
Legal precedent is clear that benefit plan participants must first adhere to their plan’s internal claims procedures before gaining eligibility to sue through the Employee Retirement Income Security Act, May wrote in her judgment …
Photo courtesy of Inland Seafood