West Monroe Partners Employee Stock Ownership Plan ERISA Class Action
Case name: Matthew Daly, et al. v. West Monroe Partners, Inc., et al.
Case type: Financial Services Litigation
Filed in: U.S. District Court for the Northern District of Illinois
Are you a former employee of West Monroe Partners who invested in the company’s Employee Stock Ownership Plan (ESOP) beginning in 2012 or thereafter? If this applies to you, please send your name, contact information, and when you were an employee at West Monroe Partners to [email protected], or fill out the contact form below.
In December 2021, Sanford Heisler Sharp filed a class action lawsuit under the Employee Income Retirement Security Act (ERISA) against consulting firm West Monroe Partners (“West Monroe”) on behalf of more than 100 former employees.
The Complaint alleges that senior executives at West Monroe, a self-described “digital consulting firm” incorporated in Delaware and based in Chicago, Ill., breached ERISA’s fiduciary duties and engaged in prohibited transactions as part of a stock buy-back scheme in which it purchased employee shares in the company’s employee stock ownership plan (“the Plan”) only one month before using that stock in a lucrative deal in which it sold half the company to a private equity firm that valued West Monroe Partners at $1.4 billion. The bargain buy-back of the employee-held stock, at less than 32 cents on the dollar, was a prohibited transaction under ERISA, costing Plan participants millions of dollars in retirement savings, the Complaint alleges.
High-ranking West Monroe employees were well aware that they would soon reap the profits of their buy-back plan by selling the stock at a far higher price, the Complaint alleges. Indeed, beginning in 2020, West Monroe began positioning the company for a sale by laying off 10% of its workforce while acquiring two companies to better position its offerings. At the same time, the Complaint alleges, West Monroe enabled company directors to buy equity in the company outside the Plan, which was the only investment avenue available to lower-level employees, and undervalued the company stock leading up to the buy-back of employee Plan shares.
Plaintiff and the class bring their claims under ERISA for breach of fiduciary duty, failure to monitor, and unjust enrichment, among other causes of action. The Complaint also names as Defendants West Monroe Partners’ Benefits Committee, Board of Directors, and Argent Trust, the Plan’s trustee.
On June 15, 2022, the court appointed Sanford Heisler Sharp and Matt Singer Law, LLC as interim class counsel. An Amended Complaint was filed on August 19, 2022. The case is currently in the discovery phase.
- Consulting Firm Can’t Ditch $2.5B Stock Deal Shorting Suit, Law360, March 16, 2023
- West Monroe Partners Employee Stock Buyback Suit Moves Forward, Bloomberg Law, March 16, 2023
- West Monroe Partners Sued Over Employee Stock Plan Cash Out, Bloomberg Law, December 22, 2021