On September 26, Judge William Kennelly, US District Court for the Northern District of Illinois, ruled that five of the six claims raised by employees of McBride & Sons, a St. Louis-based residential home builder, would not be dismissed. McBride & Sons had argued that all of the claims against them should be dismissed instead of the single count that Judge Kennelly dismissed in his ruling.
The case centers on a series of 2017 transactions through which John Eilermann, Jr., McBride’s CEO, and Michael D. Arri, McBride’s CFO, purchased a controlling interest in McBride from the Employee Stock Ownership Plan (ESOP), a retirement savings vehicle that had been offered to McBride employees. The employees claim that Eilermann and Arri worked with the plan’s trustee, GreatBanc Trust Company, to decide on a sale price far below market rates, allowing the executives to purchase the company from the employees at below fair market value.
The tale is not unfamiliar to Bailey & Glasser’s ERISA group, which has a long history of representing employees in lawsuits over ESOP transactions. The Bailey & Glasser team included Gregory Porter and Mark Boyko. Porter noted that they filed the case to “assure that the workers who rebuilt McBride & Son after the financial crisis receive the fair benefit their decade of hard work.”
A copy of the Court’s order can be found here.