North Highland Reorganization Spurs Employee Stock Plan Lawsuit

Three former North Highland Co. employees claim their stock plan’s ownership interest in the company was improperly diluted during a corporate restructuring meant to benefit executives and skirt tax laws, according to a federal complaint filed in Georgia.

The proposed class action, docketed Monday in the US District Court for the Northern District of Georgia, challenges a 2016 restructuring in which the North Highland employee stock ownership plan exchanged all its shares in the company for about 4.8 million shares of a newly formed S-Corporation. This reorganization, coupled with subsequent transactions completed on unfavorable terms, ultimately caused the plan’s ownership ...