A certified class of employee stock ownership plan participants is asking a New York federal court to ensure that a proposed BBQ ESOP DOL $15M settlement will not extinguish their path to trial in a parallel retirement benefits lawsuit tied to a $99 million stock deal.
The class, representing participants in the W BBQ Holdings Inc. ESOP, filed a letter Monday in its Employee Retirement Income Security Act case seeking clarity about a proposed consent order and judgment lodged by the U.S. Department of Labor in a separate enforcement action. The DOL docketed that proposed settlement Friday after announcing it had reached an agreement to resolve claims against Argent Trust Co. and company executives Herbert and Gregor Wetanson.
$99M Stock Deal at the Heart of the Fight
The Labor Department’s enforcement case, filed in December 2024, targets the same 2016 transaction that the ESOP class challenged in 2022: a $99 million private stock purchase in which the plan acquired 80% of company shares.
The proposed settlement calls for a $1 million cash payment from the Wetansons, a $100,000 civil penalty and a $14 million reduction in principal owed on a $71 million loan the company carries to the Wetansons. It also cancels warrants issued in the 2016 transaction — instruments the DOL said were never redeemed.
According to the DOL, those warrants would have allowed the Wetansons to acquire up to 40% of the company, potentially diluting the value of employee-held shares.
But the ESOP class, certified in May, told the court it wants confirmation that the proposed consent judgment will not block its own claims from proceeding. If the government or defendants take the position that the deal forecloses the class’s case, “the class objects to the entry of the consent order and judgment,” the letter states.
The class further contended the settlement consideration is insufficient — signaling it intends to press forward toward trial.
