Argent Trust Company, the first defendant in this case, is the trustee for the Symbria Inc. Employee Stock Ownership Plan. Argent oversaw the purchase of shares of Symbria for the plan that the complaint alleges were bought at an inflated price, saddling the plan with forty years of debt and a loss of value. The complaint alleges that the other defendants, the selling shareholders, were parties in interest and that the transaction was prohibited under the Employee Retirement Income Security Act (ERISA).
The class for this action is all participants in the Symbria Inc. Employee Stock Ownership Plan and their beneficiaries as of the date of the October 31, 2015 transaction or thereafter.
Symbria, a private company, was the sponsor of the retirement plan, which the complaint says “was designed to invest primarily in the employer securities of Symbria.” It adopted the plan on April 1, 2015 and the stock purchase took place on October 31 of the same year.
In the transaction, the plan bought all of the outstanding Symbria common stock for $66,500,000. It bought the shares, the complaint alleges, “using the proceeds of a Symbria loan guaranteed by Symbria and a loan with the Selling Shareholder that was then assigned to and assumed by Symbria…” The loan was to be repaid over forty years, at an interest rate of 2.64%. Symbria thus became 100% employee owned.
The complaint alleges, “Symbria stock is not readily tradable on an established securities market. There is and was no public market for Symbria stock.”
The selling shareholders include three individuals: Symbria’s CEO, its CFO, and the President of one of its subsidiaries. Other defendants appear to be religious and/or senior care facilities, such as Central Baptist Village, Covenant Retirement Communities, Inc., and Franciscan Sisters of Chicago Service Corporation. The complaint alleges that these organizations appointed members of Symbria’s Board of Directors.
According to the complaint, all of the selling shareholders were parties in interest to the transaction under ERISA; and the loans used to buy the stock were also party-in-interest transactions. They were therefore prohibited transactions, the complaint claims.
Argent, the plan’s trustee, was the only party to negotiate and approve the transaction. According to the complaint, “it was Argent’s exclusive duty to ensure that any transactions between the Plan and the Selling Shareholders and between the Plan and Symbria, directly or indirectly, including acquisitions of Symbria stock by the Plan and loans to the Plan, were fair and reasonable and to ensure that the Plan paid no more than fair market value.”
Article Type: LawsuitTopic: Employment
Most Recent Case Event
Symbria Employee Retirement Plan Prohibited Transactions ERISA Complaint
October 29, 2021
Argent Trust Company, the first defendant in this case, is the trustee for the Symbria Inc. Employee Stock Ownership Plan. Argent oversaw the purchase of shares of Symbria for the plan that the complaint alleges were bought at an inflated price, saddling the plan with forty years of debt and a loss of value. The complaint alleges that the other defendants, the selling shareholders, were parties in interest and that the transaction was prohibited under the Employee Retirement Income Security Act (ERISA).
Symbria Employee Retirement Plan Prohibited Transactions ERISA ComplaintCase Event History
Symbria Employee Retirement Plan Prohibited Transactions ERISA Complaint
October 29, 2021
Argent Trust Company, the first defendant in this case, is the trustee for the Symbria Inc. Employee Stock Ownership Plan. Argent oversaw the purchase of shares of Symbria for the plan that the complaint alleges were bought at an inflated price, saddling the plan with forty years of debt and a loss of value. The complaint alleges that the other defendants, the selling shareholders, were parties in interest and that the transaction was prohibited under the Employee Retirement Income Security Act (ERISA).
Symbria Employee Retirement Plan Prohibited Transactions ERISA Complaint