Casino Queen’s parent company has agreed to settle a proposed class action lawsuit filed by employees, who alleged that an overinflated stock purchase through their Employee Stock Ownership Plan (ESOP) cost them tens of millions of dollars. The settlement was outlined in a joint filing Thursday in an Illinois federal court.
U.S. District Judge David W. Dugan granted a pause in the case on Tuesday, allowing the parties to finalize their agreement. The workers and CQ Holding Co. Inc.’s board of directors are working toward a full settlement, which will also resolve an appeal pending before the Seventh Circuit. The casino’s parent company had challenged the district court’s earlier decision to keep the case out of arbitration.
The judge set a deadline of Nov. 12 for the parties to file a motion for preliminary approval of the settlement.
Casino Queen Worker settlement : Overinflated Stock Purchase at Issue
The dispute stems from Casino Queen’s 2012 sale of $170 million worth of company stock to its employee ESOP. Workers, led by plaintiffs Tom Hensiek, Jason Gill, and later Lillian Wrobel, filed the lawsuit in April 2020. They claimed the casino’s stock was significantly overvalued in the deal, violating the Employee Retirement Income Security Act (ERISA). The workers allege the company had failed to find an external buyer for the casino, located in East St. Louis, Illinois, and instead pushed the stock onto the ESOP at an inflated price.