Furniture maker McCreary Modern Inc. defeated a proposed class action saying its employee stock ownership plan was mismanaged because it parked millions of dollars in cash dividends in low-yield accounts.
The Wednesday decision by Judge Kenneth D. Bell conflicts with a February ruling allowing similar claims to advance against motions systems manufacturer Aerotech Inc. That opinion—which marked the first significant employee victory in the recent series of cases targeting ESOPs with substantial cash holdings—“appears to run counter” to both Congressional intent and US Supreme Court precedent, Bell said.
McCreary is accused of breaching its fiduciary duties under the Employee ...