Fiduciaries of the Parrot Cellular Employee Stock Ownership Plan agreed to pay $4.2 million to settle a lawsuit brought by the Department of Labor alleging inflated stock prices paid by the ESOP.
In April 2012, the Labor Department sued executives with telephone retailer Parrot Cellular, a Campbell, Calif., company that now goes by Parrot AT&T, and its independent fiduciary and investment manager, Consulting Fiduciaries Inc., over a $28 million stock purchase that involved more than 90% of the company's stock. The November 2002 stock purchase simultaneously gave the principal owner, Dennis Webb, $16 million in deferred compensation.
Under the terms of the settlement agreement announced Wednesday, Consulting Fiduciaries will pay $2 million to the ESOP to settle the allegations. Mr. Webb, principal owner of Entrepreneurial Ventures Inc., which operates Parrot Cellular retail stores, and EVI executives Matthew Fidiam and J. Robert Gallucci, all of whom are ESOP trustees, agreed to collectively pay $1.5 million to the ESOP; Mr. Webb will pay an additional $681,818.
Representatives of Northbrook, Ill.-based Consulting Fiduciaries could not be reached for comment; the listed phone number was disconnected. Calls to Parrot Cellular were not returned by press time.