4/16/2023 0 Comments First bankers trust quincy il![]() ![]() Instead, they placed their own interest above those of the plan’s participants who put their trust in the plan, its trustee and other fiduciaries,” said Susan Hensley, EBSA’s regional director in Boston. “The department alleges that the defendants breached their fiduciary responsibilities to act solely in the interest of the plan and its participants with care, skill, prudence and diligence, and solely in accordance with the plan’s documents as required by law. They also failed to prevent the ESOP’s purchase at what they knew or should have known was an inflated price, and participated knowingly in First Bankers’ fiduciary breaches and otherwise failed to comply with their own fiduciary duties. Sonnax, Harmon and Fritz knew that First Bankers’ work was flawed yet failed to ensure that First Bankers fulfilled its fiduciary duties. ![]() Purchased highly leveraged Sonnax stock for far more than fair market value, with the aid and knowledge of Sonnax, Harmon and Fritz.Did not prudently investigate the transaction’s merits.Relied on a flawed valuation of the stock.Failed to protect the ESOP in connection with the plan’s purchase of Sonnax stock from Harmon and Fritz.In its suit, the department alleges that the defendants violated ERISA’s prohibited transaction and fiduciary duty provisions. The department’s Employee Benefits Security Administration investigated and found that First Bankers’ valuation that justified the sales was flawed and its representation of the ESOP during negotiations deficient, resulting in a significant inflation of the purchase price. 3, 2011, the company purchased all of Harmon’s and Fritz’s stock shares for $48.8 million and issued new shares simultaneously which were sold to the ESOP for $10 million. Those who sell their shares to an ESOP do not receive a windfall.Those retained to advise an ESOP about the stock purchase fulfill their fiduciary duties under ERISA.The price an ESOP pays for the stock reflects its true market value.Participants’ benefits depend on the ESOP buying and selling stock for fair market value, so the department intends to make certain that: ![]() All defendants are fiduciaries of and parties in interest to the ESOP.Īn ESOP is a type of retirement plan that is permitted to invest some or all of its assets in employer stock. Sonnax, Harmon and Fritz hired First Bankers in 2010 as an independent fiduciary to advise the ESOP on whether, and at what price, to purchase shares of Sonnax from Harmon and Fritz. Named in the suit are Sonnax Industries, Inc., a Bellows Falls supplier of automotive drivetrain products Tommy Harmon, its president and chief executive officer Frederick Fritz, a board member with substantial company control and First Bankers, headquartered in Quincy, Illinois. ![]() Department of Labor is suing the fiduciaries of a Vermont employee stock ownership plan for violations of the Employee Retirement Income Security Act alleging that First Bankers Trust Services, Inc.’s 2011 purchase of the company on behalf of the ESOP from its two previous owners caused the plan to suffer sizable financial losses. Veterans' Employment and Training Service (VETS).Pension Benefit Guaranty Corporation (PBGC).Ombudsman for the Energy Employees Occupational Illness Compensation Program (EEOMBD).Office of Workers' Compensation Programs (OWCP).Office of the Chief Financial Officer (OCFO).Office of the Assistant Secretary for Policy (OASP).Office of the Assistant Secretary for Administration and Management (OASAM).Office of Labor-Management Standards (OLMS).Office of Federal Contract Compliance Programs (OFCCP).Office of Disability Employment Policy (ODEP).Office of Congressional and Intergovernmental Affairs (OCIA).Office of Administrative Law Judges (OALJ).Occupational Safety and Health Administration (OSHA).Mine Safety and Health Administration (MSHA).Employment and Training Administration (ETA).Employees' Compensation Appeals Board (ECAB).Employee Benefits Security Administration (EBSA).Bureau of International Labor Affairs (ILAB). ![]()
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