McCreary Modern Sued Over Worker Stock Plan Dividend Strategy

Furniture maker McCreary Modern Inc. was hit with a proposed class action saying it mismanages its employee stock ownership plan by parking millions of dollars worth of cash dividends in accounts that produced paltry returns.

McCreary failed to implement a reasonable reinvestment strategy for the cash dividends earned by the plan, keeping as much as $16 million in cash accounts that earned only about 1.3% per year in interest, a former plan participant said in the complaint. This “carelessness” by the company caused the plan to lose out on about $17.5 million in investment earnings since 2019, or about ...