Defense Contractor Diluted Employee-Owned Shares, DOL Argues

An employee-owned Alabama defense contractor improperly diluted the value of worker-owned shares when it refinanced its debt and inflated its authorized capital, the US Labor Department alleged in a new federal lawsuit.

Huntsville-based Gleason Research Associates Inc., three of its top executives, and the employee-stock ownership plan that received the newly authorized shares in 2017 breached their fiduciary duties to protect plan participants and beneficiaries, the DOL said in the US District Court for the Northern District of Alabama complaint on Friday.

Employee-owners of the company were locked into a $33.08 price when the company initially transferred ownership interest to ...