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Compliance April 29, 2009
Judge Dismisses Most of U.S. Sugar ERISA Breach Suit
A federal judge in South Florida has thrown out virtually all of the allegations leveled against U.S. Sugar Corp. of Clewiston, Florida, in a class action lawsuit.
Reported by Fred Schneyer
A South Florida Business Journal report said U.S. District Judge Donald M. Middlebrooks of the U.S. District Court for the Southern District of Florida dismissed 12 of 13 counts in the January 2008 fiduciary beach suit filed by participants in an employee stock ownership plan (ESOP).
The suit alleged the company and its top executives violated the Employee Retirement Income Security Act (ERISA) by trying to deprive shareholders of their right to sell shares of company stock on two occasions when U.S. Sugar was pondering buyout offers.
Middlebrooks asserted in his ruling that the plaintiffs did not exhaust all of their administrative remedies and that they could not claim an ERISA fiduciary breach because they held the shares in an ESOP and not directly.
The only fiduciary breach claim to survive was made by Mary Rafter, a former secretary and administrative assistant for U.S. Sugar and a direct minority shareholder, according to the news account.