Restaurants, Valuations and “Cherry-Picked” Data
The DOL’s complaint alleges that shareholders in the 2016 transaction — including the Wetansons — operated 12 New York City restaurants, 10 under the Dallas BBQ brand, known for budget-friendly barbecue and frozen drinks.
The government claims the ESOP transaction relied on “cherry-picked and outdated data,” painting an overly optimistic picture of the restaurant business. Those projections, the DOL alleges, caused the plan to overpay for company stock, harming employee participants.
The agency also asserted that the 20% stake not sold to the ESOP was converted into warrants, a move that could have further depressed share value.
In a letter supporting the settlement, the DOL urged the court to approve the agreement, stating there was “no suggestion of improper collusion or corruption” and that the resolution adequately addressed the alleged ERISA violations.
Still, attorneys for Argent Trust Co. and the Wetansons, while seeking approval of the deal, pushed back on language suggesting they “caused and knowingly participated” in ERISA breaches. They pointed to provisions clarifying that the settlement does not constitute an admission or denial of wrongdoing.
The class action against company executives and Argent is moving toward trial after Argent failed in 2022 to compel arbitration.
Argent declined to comment. Counsel for the Wetansons and the class did not immediately respond to requests for comment.
The DOL is represented by attorneys from its Office of the Solicitor. Argent and the Wetansons are represented by Groom Law Group Chartered. The class is represented by Cohen Milstein Sellers & Toll PLLC.
As the court weighs whether to bless the BBQ ESOP DOL $15M deal, one question looms: Will the government’s settlement close the chapter — or merely set the stage for a broader reckoning at trial?
