Raydon Corp. Employee Stock Ownership Plan

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Summary of the Lawsuit

The lawsuit alleges that Raydon Corporation and other fiduciaries of the Raydon Corporation Employee Stock Ownership Plan (“the ESOP” or “the Plan”) violated the Employee Retirement Income Security Act of 1974 (“ERISA”) by breaching their fiduciary duties with respect to the September 30, 2015 transaction in which 100% of Raydon stock was sold to the ESOP.

Summary of the Claims

The Complaint alleges that Defendants Donald K. Ariel and David P. Donovan breached their fiduciary duties when they sold 100% of the stock of Raydon Corporation on September 30, 2015 to the ESOP for $60,500,000. Lubbock National Bank had valued the ESOP’s stock at only $4,550,000 as of December 31, 2017.

The Complaint alleges that the transaction was not made to be in the best interests of the ESOP participants; the selling shareholders failed to disclosure material information to the Trustee, Defendant Lubbock National Bank, about the loss of a key contract; and Defendant Lubbock National Bank failed to perform adequate due diligence and caused the ESOP to pay in excess of fair market value. As a result of these alleged ERISA violations, Plaintiff and other ESOP participants and beneficiaries allege they have not received all of the hard-earned retirement benefits or the loyal and prudent management of the ESOP to which they are entitled.

Class Action Allegations

This lawsuit is brought on behalf of the following class:

All participants in the Raydon Corporation ESOP from September 30, 2015 or any time thereafter who vested under the terms of the Plan and those participants’ beneficiaries.

Excluded from the Plaintiff Class are Defendants and their immediate family, any fiduciary of the Plan; the officers and directors of Adams and Associates or of any entity in which a Defendant has a controlling interest; and legal representatives, successors, and assigns of any such excluded persons.

Status of the Litigation

The Complaint was filed on December 5, 2018. The Amended Complaint was filed on April 23, 2019. Defendants filed motions to dismiss on May 28, 2019.

Case Documents

Class Action Complaint - December 5, 2018

Media Coverage

Whom to Contact for More Information

If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

R. Joseph Barton, Esq. (jbarton@blockesq.com)
Ming Siegel, Paralegal (ming@blockesq.com)
Block & Leviton LLP
1735 20th Street NW
Washington DC 20009
(202) 734-7046

Block & Leviton is co-counsel in this litigation with Feinberg Jackson Worthman & Wasow LLP and Burr & Smith LLP.

Contact us to learn more about this investigation.

Block & Leviton LLP
155 Federal Street, Suite 400
Boston, MA 02110
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