KR Chalks Up Another ERISA Victory

On May 3, 2016, the US Court of Appeals for the 5th Circuit affirmed a $6.5 million judgment in favor of Keller Rohrback client Vincent Sealy. Mr. Sealy is a participant in his former employer’s ESOP plans, a tax-favored business structure that allows employees to hold shares of their employer’s stock. The legal dispute arose because the former owner of the company, Herbert Bruister, sold his stock to the ESOP at a dramatically inflated price. The ESOP paid way too much, causing to company to fail and the ESOP shareholders to lose their entire retirement savings. At trial numerous complex issues were presented, including the actual fair market value of the ESOP stock at various points in time. On appeal, the 5th Circuit affirmed the trial court’s $6.5 million damages award. Keller Rohrback partner Gary Greenwald commented, “We are gratified that the Court of Appeals sustained the well-considered judgment rendered by the trial judge. Mr. Sealy and the other ESOP participants have been waiting many years to recover some of their losses, and now the day of reckoning is finally here. Mr. Bruister lost at trial and now he has lost again on appeal. It is time for this sad story to end.”

Perez v. Bruister, No. 14-60811 (May 3, 2016).

Next, Keller Rohrback will continue its efforts to help Mr. Sealy collect on his judgment, which is accruing interest. A related action has been filed alleging that Mr. Bruister conspired with his attorneys and insurance companies to prevent Mr. Sealy and the ESOP from recovering insurance proceeds related to the underlying losses. Litigation will continue until Mr. Sealy and the ESOP recover every penny they deserve under the 5th Circuit’s ruling.