DOL Obtains $10 Million Settlement in Suit Against ESOP Company

A lawsuit filed by the U.S. Department of Labor against the DirecTECH Holding Co. Inc. Employee Stock Ownership Plan resulted in six consent judgments requiring payment of $10,454,545 in restitution to plan participants and $1,045,454 in civil penalties to the federal government. The plan covered 5,799 participants employed by businesses in Kentucky, Michigan, and Louisiana. According to the DOL's suit, plan fiduciaries allegedly retained appraisers with insufficient qualifications, used inadequate valuation methods for stock transactions, and provided inaccurate information to the appraiser. Litigation against remaining defendants is ongoing.