Roofing Company, GreatBanc Trust Defeat Worker Stock Plan Suit

Central States Manufacturing Inc. prevailed in a lawsuit challenging part of a transaction intended to mitigate impending repurchase obligations for its employee stock ownership plan.

There’s no evidence that the roofing company was acting as a fiduciary of the plan by “investigating, approving, and consummating the two-part releveraging transaction,” the US District Court for the Western District of Arkansas said Monday. And the plaintiffs’ insinuation that the plan trustee effectively rubber stamped the transaction “is borderline frivolous,” Judge Timothy L. Brooks said.

Central States in August 2020 purchased more than 2 million shares from the plan at $18 per ...