AUBURN — A group of Maine Oxy employees has filed a class-action suit against the owner of the company, claiming that he breached an Employee Stock Ownership Plan by misrepresenting the value of the employees’ stock shares so that he could buy them back at a steep discount.
The suit, filed in U.S. District Court in late April, pits a group of four former employees against Daniel Guerin, the president of Maine Oxy who took on full ownership of the medical, industrial and specialty gas company in late 2012.
The suit lists the four former Maine Oxy employees as plaintiffs, although the document states that they represent other workers — roughly 100 — whom they claim were likewise swindled by Guerin.
According to the suit, after he assumed ownership of the company, Guerin told the ESOP committee that Maine Oxy could no longer afford the plan and that ESOP would have to be dissolved, its shares sold back to the company.
The stock option had been offered to employees since 2004. By 2006, employees had acquired 49 percent of the company.
The suit alleges that Guerin began a scheme to buy back the employee shares, threatening, harassing and otherwise intimidating employees who would not go along.
According to the suit, the harassment included “phone calls at work and at home as well as face-to-face meetings with defendant Mr. Guerin. During these confrontations, Mr. Guerin harassed and verbally harangued the employee to sell his stock back to the company post haste. The same employee was lobbied by other agents of the owner and bluntly informed that if he did not sign the stock over Mr. Guerin would find a reason — any reason — to fire him. One employee who initially refused to sell his stock back to the company was informed by defendant Mr. Guerin that he would ‘ruin’ the employee’s life and that the company would ‘write him a check’ and cash him out of the company.”
According to the suit, when Guerin took on ownership of the company, he refused to reveal the cost of the acquisition to employees participating in the ESOP, preventing them from determining the value of their shares.
“All told, the employee-owners were collectively offered $134 dollars a share for the 24,500 minority interest shares comprising 49% of the total number of shares — approximately $3.3 million dollars in total,” according to the suit.
However, according the court document, former owner Bruce Albiston later revealed the terms of the sale, although by then, many of the ESOP participants had already sold back their shares.
“In May or June of 2016, an ESOP participant met with Mr. Albiston,” according to the suit. “During this meeting, Mr. Albiston revealed that he had received 43 million dollars for his 51% share of the company. This was the first time that any of the ESOP participants learned that they may have unwittingly sold their shares back to the company at a steep discount.”
According to the suit, while Guerin insisted that the value of the employees’ stock shares was frozen, the value had actually risen roughly $1,000 a month in the period following Guerin’s acquisition of the company.
The suit claims that Guerin is personally liable to the employees and that he should be required to compensate them for all losses resulting from his “breach of fiduciary duty” and to restore any profits through the use of ESOP assets.
“At a minimum,” according to the suit, “the members of the class are entitled to receive the difference between the amounts paid by Maine Oxy to buy back their shares and the true value of these shares, as established by the sale of the company or otherwise.”
The suit was filed by a trio of lawyers: Thomas L. Douglas of Westbrook, Jeffrey P. Russel of Bangor and Lauren Thomas of South Portland. The attorneys are seeking a jury trial.
Guerin, through a spokesperson, denied the allegations Friday.
“Maine Oxy is aware of the lawsuit filed in District Court by four former employees,” according to Marketing Manager Diana Picavet. “While we cannot comment on the specifics of this matter, we deny any allegations of wrongdoing. During Maine Oxy’s 90-year history, our employees have always been our biggest asset and the reason behind our greatest achievements. It is disheartening to learn that these four former employees felt they weren’t treated fairly during their time with the company. We will vigorously defend against this lawsuit and look forward to presenting our facts in court.”
Maine Oxy, founded in 1929, operates 16 locations in Maine, Massachusetts, New Hampshire, Connecticut and Vermont and three in Canada.
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