Trachte ESOP Litigation
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Welcome to the Trachte ESOP Litigation Settlement Website

This website has been established to provide general information related to the Trachte Building Systems, Inc. ("Trachte") ESOP Litigation and the resulting Settlements. The capitalized terms used on this website, and not defined herein, shall have the same meanings ascribed to them in the Complaint and Settlement Agreements.

This action is pending before Judge William M Conley in the United States District Court for the Western District of Wisconsin.  The individuals representing the Class and Subclass --- Carol Chesemore, Daniel Donkle, Thomas Gieck, Martin Robbins, and Nannette Stoflet --- are the "Class Representatives" and the individuals and entities they sued who have now settled --- the Trachte Trustees, Stephen W. Pagelow, the Alliance Defendants, Karen Fenkell, the Alpha Defendants --- are collectively called the "Defendants". The Trachte Building Systems, Inc. Employee Stock Ownership Plan ("Trachte ESOP") and the Alliance Holdings, Inc. Employee Stock Ownership Plan and Trust ("Alliance ESOP") were sued solely to assure that complete relief could be granted. They are referred to as the "Nominal Defendants".

The Complaint in this Action alleges, among other things, that  because of a Transaction involving the Trachte ESOP that occurred on or about August 29, 2007 (the "2007 Transaction"), the assets of the accounts of Trachte employees who were participants in the Alliance ESOP, consisting of Alliance stock and AH Transition stock, were transferred into the Trachte ESOP. The Trachte ESOP then exchanged the Alliance and AH Transition stock for Trachte stock and purchased additional shares of Trachte stock from Alliance, AH Transition, and Defendant Stephen W. Pagelow.

The lawsuit alleges that the Defendants breached their fiduciary duties and/or engaged in self-dealing or other prohibited transactions by transferring the Alliance accounts to the Trachte ESOP  and causing the Trachte ESOP to purchase Trachte at more than fair market value.

The Class Representatives have reached a settlement in principle with the following Defendants:

  • Trachte Trustees and Pagelow on May 27, 2013
  • David and Karen Fenkell (only with respect to the 2007 Transaction Phantom Stock) on November 29, 2013
  • Alliance Entities on February 6, 2014
  • David Fenkell with respect to the remaining claims on March 28, 2014
  • Alpha Defendants on March 28, 2014

Any defendants who have not settled in full (i.e. David Fenkell) will be entitled to dispute and contest the judgments entered in this case with respect to any claims that they have not settled.

On February 19, 2014, and April 9, 2014 the Court preliminarily approved the Settlements and has scheduled a final Fairness Hearing on July 24, 2014 to evaluate the fairness and adequacy of the Settlement.

The Class consists of participants in the Trachte ESOP at any time from August 29, 2007 to the present who had an account or received an allocation which they did not subsequently forfeit under  the terms of the Trachte ESOP Plan Document and the beneficiaries of such participants.

The Subclass consists of participants or beneficiaries of the Alliance ESOP at the time of the 2007  Transaction whose accounts were transferred to the Trachte ESOP on or about August 29, 2007, as part of the 2007 Transaction.

Excluded from the Class and the Subclass are any named Defendants, any fiduciary of the Trachte  ESOP or Alliance ESOP during the 2007 Transaction on or about August 29, 2007 and any members of their immediate families, legal representatives, heirs, successors or assigns.

If you are included in the above definitions of the Class or Subclass, you are included in the Class or Subclass.  The Class and Subclass are mandatory classes and you cannot opt-out.

Although the information on this website is intended to assist you, it does not replace the information contained in the Notice or the Settlement Agreements, all of which can be found on the Case Documents tab and downloaded from this website. We recommend that you read the Notice and other relevant case documents carefully.