Corey Rosen
Court Says Plan Remedies Must Be Exhausted Before Lawsuit Can Be Filed
In a potentially important ruling, a district court has dismissed a case against the defendants at Inland Fresh Seafood Company because the plaintiffs did not first exhaust the administrative remedies for complaints provided by the plan. In Bolton v. Inland Fresh Seafood Employee Stock Ownership Plan, No. 1:22-cv-04602-AT (N.D. Ga. Dec. 5, 2023), the plaintiffs contended that a 2016 $92 million sale to the ESOP was overpriced. The plaintiffs alleged that the defendants (including the independent trustee) and sellers to the ESOP (all of whom were executives of the company) and the executives each were acting as fiduciaries. The suit alleged the executives had already received multiple bids for the company at lower prices. The plaintiffs alleged that management provided the appraiser with highly unrealistic projections about significant increases in revenues and profits, which they alleged were accepted to provide a higher than fair value. The plaintiffs said the defendants sought multiple valuations for the stock and accepted the highest one.
