Gardner v. Heartland Indus. Partners, LP

Heartland is an investment firm that formerly held an ownership interest in Metaldyne, an automotive supplier. Leuliette is a co-founder of Heartland and was the CEO and Chairman of the Board of Metaldyne. Tredwell is also a Heartland co-founder and a Metaldyne Board member. In 2006, Heartland agreed to sell its interest in Metaldyne to Ripplewood. Metaldyne submitted an SEC “Schedule 14A and 14C Information” report that detailed the terms of the acquisition, but failed to mention that Metaldyne would owe plaintiffs, former executives, approximately $13 million as a result of the sale, under a change-of-control provision in Metaldyne’s “Supplemental Executive Retirement Plan,” in which Plaintiffs participated. The SERP is subject to Employee Retirement Income Security Act of 1974. Ripplewood threatened to back out of the deal when it found out about the obligation. In response, Leuliette and Tredwell persuaded Metaldyne’s Board to declare the SERP invalid without notifying Plaintiffs. The Ripplewood deal closed less than a month later. Leuliette personally collected more than $10 million as a result. Plaintiffs claimed tortious interference with contractual relations. The district court dismissed. The Sixth Circuit reversed, holding that the state law claims were not “completely preempted” under section 1132(a)(1)(B) of ERISA. View "Gardner v. Heartland Indus. Partners, LP" on Justia Law