Salaried employees of Cone Mills Corp. have won a rehearing of their case alleging they had been misled about their retirement benefits.
The case stems from the 1983 leveraged buy-out of Cone Mills, and the $64 million employee stock ownership plan that was created for its workers then.
The employees first won, and then lost on appeal, their case that all money the company promised would go to the ESOP.
All 15 judges of the Fourth Circuit U.S. Court of Appeals will re-hear the appeal to decide whether the employer's promised benefit is valid.
Cone used a $69 million reversion from its pension plans toward the buy-out. According to a brief filed by the Department of Labor in support of the rehearing, Cone had promised the salaried employees the entire reversion would be contributed to the ESOP.
Over the years, the company has repaid most of the $69 million to the ESOP. In 1991, a U.S. District Court said Cone had to pay the remaining $14.2 million. The Fourth Circuit reversed the decision, saying the company's promise was not enforceable.
The re-hearing is scheduled for the first week in March.
- Patricia B. Limbacher
