The Department of Labor filed a lawsuit against the Maran Inc. employee stock ownership plan and its independent fiduciary and trustee, First Bankers Trust Services, for allegedly allowing overpriced stock purchases.
The suit, filed in U.S. District Court in New York, came after an investigation started in 2006 into the ESOP stock purchases of 49% of outstanding Maran stock.
The DOL claims New York-based Maran and First Bankers Trust Services violated ERISA by approving the purchase for $71 million, a figure that Labor Department officials said in a statement “was more than fair-market value” and resulted in “significant losses” to participants.
The suit is seeking to recover the losses and to have First Bankers Trust Services barred from serving as an ESOP plan fiduciary.
Brian Ippensen, First Bankers Trust Services president, said in an e-mail that the company intends to “vigorously defend” the lawsuit. Calls to Maran were not returned at press time.
The ESOP had $399,434 as of Dec. 31, 2011, according to the company's Form 5500.