$60 Million Victory for Avondale
CHICAGO - McDermott Will & Emery is pleased to announce a trial victory on behalf of four former officers of Avondale Industries, Inc., a New Orleans-based shipbuilder, who were members of the Administrative Committee of Avondale's Employee Stock Ownership Plan (ESOP) and trustees of the ESOP.
The four officers represented by McDermott Will & Emery, the Chairman of the Committee, members of Avondale's senior management and Avondale were sued by three former Avondale employees, participants in the ESOP, in a derivative action on behalf of the ESOP. The former employees, who were originally seeking $60 million in damages, alleged that the Committee conspired with management to sell-off the ESOP's Avondale shares in violation of Employee Retirement Income Security Act of 1974. The plaintiffs contended that the challenged stock sales were carried out for less than fair value and for the illicit purposes of diminishing the employee shareholders' powers, including their power to elect Avondale's directors, to influence Avondale's business decisions, and to enact union-sponsored corporate governance initiatives. The plaintiffs also alleged that the sales were carried out for the improper purpose of lessening the union's voice in Avondale's corporate affairs.
After an eight-day bench trial in the United States District Court for the District of Louisiana and substantial post-trial briefs, the Court found that the plaintiffs completely failed to prove their claims. Accordingly, claims were dismissed with prejudice and plaintiffs were ordered to pay defendants' costs. The Firm's clients, the four former Avondale officers, were obviously very pleased with the favorable result.
The Firm's trial team included Nancy G. Ross and Dawn R. Connelly from the Firm's Chicago office, and Melvin White from the Washington, D.C.
