# Bowers

> District Court, D. Massachusetts · May 29, 2026

URL: https://www.frixlaw.com/law-library/cases/11343636

## Case

- **Full name:** Rita Bowers, et al. v. John H. Russell, et al.
- **Court:** District Court, D. Massachusetts
- **Decided:** May 29, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11343636

## How later opinions describe it (automated extraction)

- noting that this duty is part of the duty of prudence
- noting that ERISA does not necessarily require “maximiz[ing] the award to the beneficiary”
- holding that corporate committee’s named fiduciary status was attributable to individual committee members
- noting that § 1108(e) also provides “a statutory exemption to [§ 1106(b)’s self-dealing] restriction with respect to ESOPs”

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
RITA BOWERS, et al., )
)
Plaintiffs, )
)
v. ) Civil Action
) No. 22-cv-10457-PBS
JOHN H. RUSSELL, et al., )
)
Defendants. )
______________________________ )

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
May 29, 2026

Saris, J.
INTRODUCTION
This case concerns a family business.1 The family at issue is
the Russell family, whose members the Court refers to by first
name to avoid confusion. The business is Russelectric, an
electrical equipment manufacturing company founded and owned by
Raymond Russell.
Facing the threat of divorce from his wife Carol, Raymond
created an employee stock ownership plan (the “ESOP” or the
“Plan”).2 Three of the couple’s four children -- John, Suzanne,

1 In HBO’s Succession, Shiv Roy says, “Family and business are
dangerously close.” This litigation exemplifies that lesson.
2 An ESOP is “a type of pension plan that invests primarily in the
stock of the company that employs the plan participants.” Fifth
Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 412 (2014).
and Lisa (“Defendants”) -- took Carol’s side in the divorce and
opposed the ESOP from its inception.
It came as no surprise, therefore, that when given the

opportunity in 2016, John -- who was then Chairman of the Board of
Directors of Russelectric (the “Board”) following his father’s
death -- embraced the opportunity to terminate the ESOP and redeem
its shares. The ESOP’s participants received payments for the
shares that were allocated to their individual accounts, but not
for shares that had not yet been allocated. Several years later,
participants received clawback payments stemming from a sale of
Russelectric to Siemens -- but again, only in proportion to the
allocated shares, not the unallocated ones. In connection with the
Siemens transaction, the Russell children also awarded bonuses to
themselves and others in their family, the Board, and Russelectric
management. The bonuses effectively reduced the amount of the

clawback payments to plan participants.
This litigation ensued. Named plaintiffs Rita Bowers, Michele
Gear-Cole, Florence Lorenzano, and Reginald Tercy are four former
Russelectric employees who represent a certified class of past
ESOP participants (collectively, “Plaintiffs”). Plaintiffs assert
that John committed violations of the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., in
relation to the redemption transaction and the negotiation and
administration of the accompanying clawback provision. They
further allege that Suzanne and Lisa knowingly participated in,
and benefitted from, those violations. The crux of Plaintiffs’
claims is that Defendants should have included unallocated shares

in the clawback provision, that all shares were undervalued in the
redemption transaction, and that Defendants unlawfully reduced the
clawback payments by awarding bonuses.
The Court held a twelve-day bench trial in September and
November 2025. It now issues the following findings of fact and
conclusions of law regarding Plaintiffs’ ten ERISA claims. As the
Court will explain, it finds that Plaintiffs have failed to show
that the clawback provision should have included unallocated
shares. It further concludes that Defendants have demonstrated
that the redemption transaction was for fair value. Plaintiffs
have, however, met their burden in establishing that several of
the bonus payments were excessive and a breach of fiduciary duty.

Accordingly, judgment will enter for Plaintiffs in part and
Defendants in part. As the Court will explain, judgment will enter
for Plaintiffs against John on Counts VII and VIII and against all
Defendants on Count X. Supplemental briefing is ordered regarding
the exact calculation of damages.
FINDINGS OF FACT
The Court makes the following findings of fact based on the
testimony and exhibits presented at the bench trial.3
I. Formation of the ESOP

Russelectric was a company that manufactured electrical
equipment such as switch gears and transfer switches. Tr. 1-26:16-
24. The company was founded by Raymond Russell. Tr. 4-89:11-14.
Raymond and his wife Carol had four children: John, Suzanne, Lisa,
and James. Tr. 3-11:18-19.
The ESOP was formed on October 4, 2010, at Raymond’s
direction. Tr. 1-10:22-11:4, 14:17-21. Argent Trust Company
(“Argent”) was named as trustee of the ESOP. Tr. 1-7:16. At issue
in this litigation are the actions taken by the three elder Russell
children -- John, Suzanne, and Lisa –- with respect to the ESOP.
In the formation transaction, Russelectric lent money to the

ESOP, and the ESOP used the loan proceeds to purchase approximately
$22 million in Russelectric shares to be used as collateral for
the loan. Tr. 1-9:4-8, 14:22-24. The shares were held in a suspense
account; as contributions were gradually made by Russelectric to
the ESOP, the loan was repaid and the shares were allocated to

3 Record citations are to the trial transcripts (e.g., “Tr. 1” is
the transcript from the first day of trial), deposition testimony
played at trial (e.g., “Martin Dep.” is the transcript of the
deposition testimony of Steve Martin), or an exhibit admitted at
trial (e.g., “Ex. 245”).
individual employees’ participant accounts. Tr. 1-9:9-16. Once
placed in individual participant accounts, the shares became known
as “allocated shares”; before that time, they were considered

“unallocated shares.” Tr. 1-9:21-10:1, 10:8-12. Under the ESOP
plan document, in the event Russelectric terminated the ESOP, the
proceeds of the unallocated shares would be used to repay the
outstanding loan, with any remaining proceeds to be allocated to
participants. Ex. 245. If the unallocated shares were not valued
high enough to pay off the loan at that time, they would be returned
to the company and the outstanding loan balance would be forgiven.
Ex. 245; Tr. 2-26:7-11.
At the time the ESOP was formed, Raymond and Carol were
embroiled in bitter divorce proceedings. Tr. 4-87:18-20. John,
Suzanne, and Lisa took Carol’s side in the divorce. Tr. 4-88:1-
12. In Carol’s and the children’s view, Raymond formed the ESOP in

order to “defraud [Carol] out of her marital estate.” Tr. 4-88:15-
18. In particular, after the ESOP was created, Raymond and Carol
held a 35% interest in Russelectric, while the ESOP held a 30%
interest. Tr. 3-31:3-10, 38:19-21. The creation of the ESOP thus
ensured that Carol could not win more than half of the company in
the divorce proceedings. Tr. 4-89:11-19. As a result of Raymond’s
suspected machinations, John hated the ESOP, believing that it
“was the cause of [his] parents’ divorce.” Tr. 4-88:15-18. As John
candidly testified, he “was not a fan of the ESOP.” Tr. 4-88:15-
18.
II. Corporate Governance of Russelectric

After the death of their parents, the Russell children became
majority owners of Russelectric, holding 70% of its shares (via a
series of trusts) while the ESOP held 30%. Tr. 3-32:13-16; Ex. 90.
The corporate governance of Russelectric was set forth in a
Mediation Settlement Agreement (the “MSA”) ensuing from the
divorce proceedings. Tr. 2-17:12-15. The MSA dictated that the
Board include three members, two of which would be independent
from the Russell family. Tr. 2-17:22-25. In April 2015, Dennis
Long and Denise Wyatt were selected as the two independent Board
members, while John served as the third member and Chairman. Tr.
1-5:11-25, 14:25-15:2; Tr. 3-29:3-5; Tr. 4-86:8-10.
The MSA also created an “Advisory Board” consisting of several

Russell family members: Suzanne, Lisa, James, Jennifer Novak
(Suzanne’s daughter), and Matthew Russell (John’s son). Ex. 40;
Tr. 1-119:3-8; Tr. 3-10:13-14, 11:18-19; Tr. 5-121:16-23. The
members of the Advisory Board were not actively involved in
corporate governance, but they frequently attended Board meetings
to learn more about the company with the objective of eventually
helping lead the business. Tr. 1-119:21-22; Tr. 3-85:4-8; Tr. 5-
121:7-9. Advisory Board members were paid approximately $40,000
per year. Tr. 1-119:10-12.
III. Clawback Negotiation
On September 24, 2015, Russelectric’s Board (i.e., John,
Long, and Wyatt) voted to terminate the ESOP. Tr. 1-22:3-16; Ex.

8. The ESOP would terminate in 2016, and its shares would be
redeemed. Tr. 1-22:3-16. In conjunction with the termination of
the ESOP, the Board also voted to freeze Russelectric’s defined
benefit (i.e., pension) plan and to enhance the company’s 401(k)
plan by adding an employer contribution. Tr. 1-78:17-23, 79:8-10,
81:11-13.
At the time of the Board’s decision, the ESOP’s trust
agreement specified that Argent was a “directed trustee as
described in ERISA § 403(a).” Ex. 75; see Tr. 1-49:10-13, 21-23;
29 U.S.C. § 1103(a)(1) (allowing a trustee to be expressly made
“subject to the direction of a named fiduciary”). In particular,
Argent was made “subject to the direction of the Company” – i.e.,

Russelectric. Ex. 75. By resolution of Russelectric’s Board, John,
as Chairman, was given the authority to “terminat[e]” all
agreements with Argent and to replace Argent at any time with a
different ESOP trustee. Ex. 8; Tr. 1-24:4-15.
Despite being contractually considered a “directed trustee,”
Argent viewed itself as having the discretion and responsibility
to negotiate fair termination terms for ESOP participants. Tr. 4-
26:9-12. The first set of negotiations took place primarily between
Long (one of Russelectric’s two independent Board members) and
Steve Martin of Argent. Tr. 1-29:2-4. When Long informed Martin of
the Board’s decision to terminate the ESOP by buying out its
shares, Martin requested a three-year “clawback” provision. Tr. 1-

28:15-20, 29:4-12. The clawback provision, as finally executed on
March 28, 2016, Tr. 1-56:20-22, provided that if a “Change of
Control Transaction” occurred within three years of the ESOP’s
termination, plan participants would
receive a cash payment equal to the product of (A) the
number of the Company’s common stock allocated to such
participant’s account in the ESOP as of the ESOP
Termination Date multiplied by (B) the difference
between (i) the per share price of the Company’s common
stock as of the ESOP Termination Date as determined by
a valuation report to be prepared by Prairie Capital;
and (ii) the net per share purchase price received by
the shareholders of the Company upon the Consummation of
the Change of Control Transaction.
Ex. 69. In other words, if Russelectric was sold within three years
at a price higher than that paid upon the termination of the ESOP,
the ESOP’s participants would receive a portion of that premium
commensurate with the number of their allocated shares. The
clawback provision did not entitle participants to any amount based
on the value of unallocated shares. Tr. 1-37:5-7.
The negotiation of this clawback provision was
straightforward. After Martin requested the provision,
Russelectric’s corporate counsel, David Barbash, drafted it and
sent it to Martin. Tr. 1-34:25-35:7, 39:12-21; Ex. 729. Three days
later, Martin responded, stating that Argent had reviewed the
provision and accepted it. Tr. 1-40:20-25; Ex. 729. Martin had
discussed the clawback with his colleagues, and Argent’s counsel
reviewed the provision. Martin Dep. 53:10-54:03; Tr. 4-27:10-16.

Upon receiving Martin’s acceptance of the provision, Long
forwarded Martin’s email to John and several others, writing, “I
still expected [Martin] to have counsel review. This is a good
result.” Ex. 732. Similarly, Barbash wrote, “That was easier than
I anticipated.” Ex. 729.
John, along with Long and Wyatt, voted to approve the clawback
agreement in his capacity as a Board member. Tr. 5-14:14-16. He
was not otherwise involved in the clawback negotiation, from which
he recused himself. Tr. 4-115:13-18.
IV. Financial Improvement of Russelectric
At the time the Board decided to terminate the ESOP,
Russelectric was in freefall. The company’s financial performance

had peaked in 2010 and then steadily diminished, hitting rock
bottom in 2016. Tr. 4-120:15-121:1. In May 2016, in an effort to
save the company, John selected a new Chief Executive Officer
(“CEO”): Dorian Alexandrescu, an immigrant who had fled political
persecution in Romania and then built a career in the electrical
products industry. Tr. 1-55:12-16; Tr. 3-8:11-16; Tr. 7-133:14-
15, 134:23-135:4, 135:20-136:14.
John’s decision to hire Alexandrescu proved to be
Russelectric’s saving grace. Throughout the fall of 2016 and in
2017, Alexandrescu gradually made major improvements to the
company. Tr. 2-55:21-56:2. He built out a new management team,
including a new Chief Financial Officer (“CFO”) named Raul Tejada,

who began work in October 2016 and became CFO in January 2017, and
a new Vice President of Operations, who began work in October 2016.
Tr. 1-76:1-3; Tr. 2-21:19-22:3, 54:24-55:1; Tr. 8-17:8-20, 18:9-
16. He also changed the company’s financial reporting structure,
Tr. 2-22:4-18; developed new markets and products, Tr. 2-23:9-15;
Tr. 5-76:3-6; reorganized the sales force, Tr. 8-12:20-13:8; and
enhanced aftermarket sales, such as upgrades to the company’s
products, Tr. 8-13:23-14:17. On the operations side, Alexandrescu
introduced “lean manufacturing,” which entailed a fundamental
redesign of Russelectric’s factories to improve efficiency. Tr. 2-
22:19-23:1.
Largely due to Alexandrescu’s interventions, Russelectric’s

financial performance improved in late 2016 and 2017. Beginning
around October 2016, the company’s backlog -- i.e., confirmed
orders yet to be fulfilled -- had begun to increase. Tr. 8-23:2-
4. Likewise, as of late November 2016, the company’s bookings and
revenue had increased in comparison to late June, though many of
the sales and bookings did not come to fruition until mid-2017.
Tr. 1-76:24-77:1, 77:5-8; Tr. 8-20:1-10. By the end of 2016,
Russelectric’s outlook had been stabilized, leading to improvement
in 2017. Tr. 5-70:21-71:8.
While these developments were gradually occurring,
Russelectric’s stock was undergoing an annual financial valuation
conducted by Prairie Capital. Tr. 1-13:8-10; Ex. 99. Much of the

valuation process occurred in September 2016, and Prairie Capital
published the final valuation on October 11, 2016. Tr. 8-36:12-
17, 38:6-21; Ex. 99. Although the valuation was published in
October 2016, it valued Russelectric’s stock as of June 30, 2016.
Ex. 99. According to the final valuation report, which was
presented to Russelectric’s Board, Prairie Capital determined that
the company’s stock was worth approximately $121 per share as of
June 30, 2016. Tr. 1-65:23-25; Exs. 99, 472.
Prairie Capital’s valuation was largely based on financial
information and projections provided to it by Russelectric’s
management, including Alexandrescu. Tr. 2-40:4-7; Tr. 8-38:19-21.
Alexandrescu gave Prairie Capital the same budget projections that

he provided to the Board. Tr. 8-38:19-21. He informed Prairie
Capital of new opportunities in product development, sales
channels, market development, aftermarket sales, and lean
manufacturing. Tr. 8-41:11-45:13; Ex 188. Prairie Capital’s
valuation was also reviewed by Argent, which determined that
Prairie Capital had used appropriate financial adjustments and
projections. Tr. 4-32:2-25.
V. Redemption Transaction
The dissolution of the ESOP (by way of the redemption of its
shares) was scheduled to occur on November 30, 2016. Tr. 1-64:20-

22. In anticipation of this redemption transaction, the Board
entered a new engagement agreement with Argent, which specified
that Argent would act as a “discretionary trustee” (rather than a
“directed trustee”) with respect to the transaction. Tr. 1-49:3-
7, 51:7-10; Ex. 124. The agreement gave Argent the right to
“approve or disapprove the proposed transaction,” Tr. 2-31:15-16,
and stated that “Argent will assume the fiduciary responsibility
for determining . . . whether the price the [c]ompany pays the
ESOP for the stock in the [p]roposed [t]ransaction is adequate
consideration, and whether the [p]roposed [t]ransaction is fair
from a financial viewpoint to the ESOP and its participants.” Ex.
124; see Tr. 2-30:20-25.

Based on this engagement agreement, the Board viewed itself
as adverse to Argent in negotiating the redemption price, with
Argent representing the ESOP and the Board representing the company
as a whole. Tr. 1-71:9-12. Alexandrescu led the negotiation on
behalf of the company. Tr. 1-55:20-24.
In order to determine the fair market value of Russelectric’s
stock as of the termination date of November 30, 2016, Argent
retained Prairie Capital to perform another valuation. Tr. 2-36:7-
20, 37:14-16, 38:12-14. The valuation was again based on financial
information provided by Russelectric’s management. Tr. 2-43:3-9,
44:5-7. Russelectric provided mostly the same financial
projections that they had given Prairie Capital for purposes of

the annual valuation, along with the total current backlog. Tr. 2-
43:3-9, 44:5-7, 45:21-25, 46:17-20; Ex. 542. Because the annual
valuation largely had been prepared in September 2016, the Board
and company management felt that no major changes had occurred
between September and November that warranted altering the
financial projections. Tr. 3-45:3-7, 45:14-19. Prairie Capital
likewise identified no major changes between September and
November 2016 justifying a substantial increase in financial
forecasts. Fiore Dep. II at 95:05-10.
After reviewing the financial information and conducting its
own independent research, Fiore Dep. II at 39:13-40:01, Prairie
Capital determined that Russelectric’s stock had a value in the

range of approximately $120 to $141 as of November 30, 2016. Tr.
2-48:7-10; Ex. 470. Prairie Capital provided this estimate to
Argent. Tr. 4-34:4-13. The valuation was never shared with
Russelectric’s management, however, despite Alexandrescu’s
repeatedly requesting it. Tr. 2-36:24-37:4; Tr. 8-54:7-8. Prairie
Capital declined to provide the valuation to Alexandrescu because
it viewed Russelectric as the counterparty in the redemption
transaction, while Argent was Prairie Capital’s client. Fiore Dep.
II at 112:17-113:18. Similarly, Argent believed that showing
Russelectric the valuation report would damage Argent’s
negotiating position. Tr. 4-37:20-25.
After receiving Prairie Capital’s valuation report, Argent

made an initial offer to Russelectric’s management, suggesting
that the ESOP’s shares be redeemed at a price of $165 per share.
Tr. 1-64:25-65:2. Argent did not provide any information
supporting this figure, even after Alexandrescu requested an
explanation. Tr. 1-109:14-20; Tr. 8-56:7-11. Argent also did not
inform the Board that the offer exceeded Prairie Capital’s
valuation range of $120 to $141. Tr. 2-48:12-49:8. The $165 offer
was not based on any internal financial analysis by Argent, Tr. 4-
17:9-11; rather, Argent viewed the offer as higher than fair market
value and a “really high price to start a negotiation.” Tr. 4-
17:6-7; see Tr. 4-17:22-18:5.
Russelectric’s Board believed that $165 exceeded fair market

value. Tr. 1-64:25-65:6. In response to Argent’s offer,
Alexandrescu conducted his own analysis and shared it with the
Board. Tr. 1-66:9-14. He prepared a worksheet in which he estimated
the actual value of Russelectric’s stock to be $134 per share. Ex.
701. In Alexandrescu’s view, the financial projections from
Prairie Capital’s annual valuation (which had been prepared very
recently in September and October 2016) remained largely the same,
except that the company had more cash on hand and decreased
liability to the defined benefit plan. Tr. 8-55:9-11; Ex. 701.
Alexandrescu had provided all of this information to Prairie
Capital as it prepared the redemption valuation. Tr. 8-57:2-8.
Long and Russelectric’s counsel also believed that

Russelectric had an important bargaining chip at its disposal. Tr.
1-96:8-14, 98:3-7, 106:13-15; Tr. 2-105:16-106:2. Long told
Alexandrescu that under the ESOP’s plan document, the company had
the right to unilaterally redeem the ESOP’s shares at $121 per
share based on the most recent annual valuation. Tr. 1-96:8-14,
98:3-7, 106:13-15, 108:6-12, 109:2-5; Ex. 737. This purported
right of redemption was known as the “autoput.”4 Long suggested
that Alexandrescu inform Martin that unless Argent provided the
updated Prairie Capital valuation, the Board would exercise the
autoput and purchase the ESOP’s stock at $121 per share. Tr. 2-
108:6-109:6; Ex. 737.
Armed with the belief that the true fair market value was

$134 and that the company could exercise the autoput at $121,
Alexandrescu responded to Argent’s offer of $165. Alexandrescu
presented a counteroffer of $134 per share and stated that if
Argent did not accept that amount, the Board would exercise the
autoput the next day. Tr. 8-101:14-18. Faced with the possibility

4 Long testified that every ESOP holding non-publicly traded stock
has a “put” provision that ensures that participants receive value
if the stock is redeemed. Tr. 1-101:15-21. He further testified
that many ESOPs have an “autoput” provision, which makes the “put”
exchange instantaneous to avoid triggering other corporate
consequences. Tr. 1-101:22-102:6.
of receiving only $121 per share, and knowing (but not telling
Russelectric) that $134 was above the midpoint of Prairie Capital’s
valuation range of $120 to $141, Argent decided to accept

Alexandrescu’s offer of $134 per share. Tr. 1-109:7-13; Tr. 4-
37:1-19; Ex. 776.
Russelectric and Argent then negotiated a formal redemption
agreement, with each side represented by counsel. Tr. 2-27:3-5,
27:11-14. The redemption agreement provided that the ESOP’s
allocated stock would be redeemed at $134 per share. Ex. 72. It
incorporated the previously negotiated clawback provision. Ex. 72.
Argent never asked to renegotiate that provision or to include
unallocated shares in the clawback. Tr. 2-29:9-13, 29:18-21; Tr.
3-23:10-17.
On the same day that the redemption agreement was
finalized - - November 30, 2016 -- Prairie Capital provided a

“fairness opinion” to Argent, which Argent forwarded to
Russelectric. Tr. 2-31:21-32:1; Ex. 636. The fairness opinion
concluded that the price of $134 per share to be received by the
ESOP was “not less than ‘fair market value’ and constitute[d]
‘adequate consideration’” and that “[t]he [t]ransaction, taken as
a whole, [wa]s fair to the [ESOP] from a financial point of view.”
Ex. 636 (quoting 29 U.S.C. § 1002(18)). The Board reviewed the
fairness opinion. Tr. 2-56:8-13.
The ESOP’s shares thus were redeemed on November 30, 2016, at
a price of $134 per share. Tr. 1-64:20-24. Each plan participant
received $134 multiplied by the number of allocated shares in their

account. Tr. 1-37:23-25. Because the value of the unallocated
shares was lower than the remaining ESOP loan balance, the
unallocated shares were returned to Russelectric and cancelled,
the loan was extinguished, and the unpaid loan balance was
forgiven. Tr. 1-37:25-38:3, 38:13-14, 73:1-5. No payout was
received by plan participants for the unallocated shares. Tr. 1-
73:6-14.
John had not been directly involved in the redemption price
negotiations, instead recusing himself and allowing Alexandrescu
to use Long as his point of contact on the Board. Tr. 2-49:13-15;
Tr. 5-67:18-21; Tr. 8-53:13-20. John never communicated directly
with Argent or Prairie Capital regarding the transaction. Tr. 5-

68:1-6. He did, however, email Alexandrescu, writing: “My personal
thanks for your efforts on behalf of the company and my family to
get a fair valuation.” Ex. 706. He also signed off on the $134
redemption price. Tr. 4-124:21-23. When the redemption transaction
was complete, John emailed his siblings, celebrating that the “ESOP
ha[d] officially died” and that Russelectric was “once again 100
percent family owned.” Ex. 700.
VI. Siemens Offer
Following the termination of the ESOP, Russelectric’s
financial performance continued to improve as Alexandrescu’s

corporate reforms took effect. Several private equity firms had
offered to buy the company in 2016, but these offers generally
were not taken seriously and John had no interest in selling to a
private equity firm at a low price. Tr. 2-67:22-68:2; Tr. 3-62:22-
24; Tr. 5-22:3-4; Tr. 8-60:1-4. A more serious offer from Western
Commerce was briefly entertained in February 2017, Tr. 3-64:2-7;
Tr. 8-112:18-25, as were two offers from AMETEK and Socomec in the
summer of 2017, Tr. 2-69:5-13. In connection with the Western
Commerce offer, Alexandrescu emailed the Board that he estimated
a selling price of $90 million, which corresponded to a
substantially higher company value than the valuation of
Russelectric during the redemption transaction. Tr. 3-64:2-65:11;

Ex. 707.
In late 2017, a major disruption occurred in Russelectric’s
market when one of the company’s main competitors, ASCO, was
purchased by Schneider Electric, a supplier of components for
Russelectric’s electrical equipment. Tr. 1-27:1-2, 27:6-7; Tr. 5-
71:9-13. This acquisition posed an existential threat to
Russelectric’s control over its pricing. Tr. 2-66:23-67:2. As a
result, Alexandrescu received permission from the Board to
approach Siemens about a potential sale of Russelectric while its
value was high. Tr. 5-71:22-72:22.
On February 20, 2018, Siemens sent a letter expressing

interest in purchasing Russelectric for $340 million. Tr. 1-110:3-
6; Ex. 831. On a per-share basis, this price far exceeded the
amount that Russelectric had paid for the ESOP’s shares less than
three years prior in November 2016. Tr. 7-35:11-36:4. As a result,
the clawback provision would be implicated.
VII. Clawback Administration
In conjunction with the imminent sale to Siemens, the Board
decided to award bonuses to various members of management and the
Russell family. The Board hired Charles Schultz, an executive pay
consultant, to advise on the proper magnitude of bonus payments.
Tr. 3-49:16-18; Tr. 5-82:12-19. John, Long, and Alexandrescu
proposed specific bonus amounts to Schultz, who largely agreed

(without much analysis) that they were within reasonable ranges of
typical executive bonuses. Tr. 3-52:14-22. Schultz spent only
around ten hours on the work. Tr. 5-83:9-20. He was unaware of the
existence of a clawback, Tr. 5-87:3-6, and had never advised a
company with an ESOP, Tr. 5-98:23-99:9. At trial, Schultz testified
that he was unable to produce a complete record of his work for
Russelectric because he destroyed some of the files when he
retired. Tr. 5-101:17-102:16.
On October 1, 2018, the Board accepted a stock purchase
agreement authorizing transaction bonuses and expenses of
approximately $77 million. Tr. 1-115:7-11, 115:17-116:4; Ex. 390.

The Board awarded bonuses of approximately (1) $14 million to John;
(2) $11 million to the members of the Advisory Board (Suzanne,
Lisa, James, Jennifer Novak, and Matthew), allotted as a pool to
be divided by the family as they chose; (3) $3 million to Long;
(4) $31 million to six individuals in management, including
Alexandrescu and Tejada; and (5) $7 million in additional fees to
Alexandrescu and Tejada for the mergers and acquisitions (“M&A”)
services they provided in connection with the Siemens
negotiations. Ex. 40; see Tr. 2-64:18-22.
On October 2, 2018, Siemens and Russelectric entered into an
agreement for Siemens to purchase Russelectric for $345 million.
Ex. 647. Because the clawback amounts would be based on the “net

per share purchase price received by the shareholders” upon a
transaction with Siemens, rather than the gross sale price, the
Board determined that the bonuses could be deducted from the sale
price before calculating the clawback. Ex. 69. Accordingly, former
ESOP plan participants received lower clawback payments than they
would have if no bonuses had been awarded. Tr. 7-35:11-36:4.
PROCEDURAL HISTORY
Plaintiffs originally brought suit against John, Suzanne,

Lisa, Long, Wyatt, and Argent in March 2022. The Court denied two
motions to dismiss in February 2024 and January 2025. See Bowers
v. Russell, 717 F. Supp. 3d 165, 177 (D. Mass. 2024) (denying
motion to dismiss Counts I-VI); Bowers v. Russell, 763 F. Supp. 3d

90, 101 (D. Mass. 2025) (denying motion to dismiss Counts VII-X).
In January 2025, the Court also certified a class consisting of
former ESOP participants and beneficiaries. See Bowers v. Russell,
766 F. Supp. 3d 136, 153 (D. Mass. 2025). The Court subsequently
entered preliminary approval of settlement agreements between
Plaintiffs and Long, Wyatt, and Argent in September 2025, for $1.5
million, $3 million, and $4.5 million, respectively. See Dkts.
434-1 at 5, 491-1 at 5, 560-1 at 4, 569-71. The Court held that it
would employ a proportionate share approach in assessing damages
to the remaining Defendants (John, Suzanne, and Lisa). See Bowers
v. Russell, No. 22-cv-10457, 2025 WL 2740682, at *2 (D. Mass. Sep.
5, 2025). The Court presumes familiarity with these prior opinions.

As relevant here, the operative complaint asserts ten ERISA
claims against John, four of which are also brought against Suzanne
and Lisa. The claims fall into four categories: (1) claims
challenging the decision to exclude unallocated shares from the
clawback provision (the “Clawback Negotiation Claims”); (2) claims
challenging the adequacy of the consideration received by the ESOP
in the November 2016 redemption transaction (the “Redemption
Transaction Claims”); (3) claims challenging the decision to award
bonuses in relation to the Siemens transaction, which reduced the
clawback payments to plan participants (the “Clawback
Administration Claims”); and (4) equitable claims seeking recovery
of traceable proceeds due to Defendants’ knowingly participating

in, and benefitting from, several of the above ERISA violations.
A twelve-day bench trial was held in September and November
2025. After reviewing the trial record and the parties’ pretrial,
trial, and posttrial briefing, the Court issues the following
conclusions of law.
CONCLUSIONS OF LAW
The Court first addresses, and rejects, two affirmative
defenses raised by Defendants. The Court then analyzes the claims

asserted against John. Finally, the Court addresses the claims
brought against Suzanne and Lisa.
I. Affirmative Defenses
At the outset, the Court must address two threshold arguments
raised by Defendants. First, Defendants contend that Plaintiffs’
claims are barred by the statute of limitations. Second, Defendants
assert that Plaintiffs released their claims. As explained below,
the Court rejects both arguments.
A. Statute of Limitations
ERISA claims must be brought before the earlier of (1) six
years after a breach or violation or (2) “three years after the
earliest date on which the plaintiff had actual knowledge of the

breach or violation.” 29 U.S.C. § 1113. A plaintiff has “actual
knowledge” of a breach if she “knows ‘the essential facts of the
transaction or conduct constituting the violation.’” Edes v.
Verizon Commc’ns, Inc., 417 F.3d 133, 142 (1st Cir. 2005) (quoting

Martin v. Consultants & Adm’rs, Inc., 966 F.2d 1078, 1086 (7th
Cir. 1992)). “[M]ere knowledge of facts indicating that ‘something
was awry’” is insufficient. Id. (quoting Martin, 966 F.2d at 1086).
Defendants argue that Plaintiffs had actual knowledge of the
alleged violations more than three years prior to bringing their
claims. In particular, Defendants contend that Plaintiffs received
a memorandum explaining the redemption transaction in December
2016 and thus that the Redemption Transaction Claims are time-
barred. Defendants further argue that the Clawback Negotiation
Claims and Clawback Administration Claims are time-barred because
Plaintiffs received a letter from Alexandrescu in October 2018
explaining that Plaintiffs would receive clawback payments based

on the number of their allocated shares.
This Court has previously explained that to demonstrate
actual knowledge for purposes of the Clawback Negotiation Claims,
Defendants are required
to show that Plan participants knew “(1) [that] the Plan
possessed unallocated shares of Russelectric stock; (2)
that the Plan sold those shares to anyone; (3) that the
terms of the ESOP termination sale differed as between
allocated and unallocated shares; (4) that the Plan
received less for unallocated shares as compared to
allocated shares; [and] (5) that the sale of the
unallocated shares was tainted by wide-ranging fiduciary
misconduct that impacted their valuation.”
Bowers, 766 F. Supp. 3d at 148 (second alteration in original)
(quoting Bowers, 717 F. Supp. 3d at 174)). The testimony at the
bench trial does not reflect this degree of actual knowledge. On

the contrary, the four named Plaintiffs each testified that they
did not even know of the existence of unallocated shares until
they were contacted about the litigation. Tr. 4-42:6-9, 60:6-9,
66:18-67:2, 68:24-69:4, 75:20-76:7, 79:2-4, 93:13-15. While the
letter sent by Alexandrescu in connection with the Siemens
transaction informed certain participants that they would be
compensated “based on the number of shares [they] held at the
termination of the ESOP,” it did not explain that unallocated
shares had also existed but not been included in the clawback
calculation. Ex. 791; see Tr. 1-74:6-11. The Clawback Negotiation
Claims thus are not time-barred.
The Redemption Transaction Claims likewise survive the

statute of limitations. Plaintiffs testified that they did not
know how the shares had been appraised for purposes of the ESOP
termination and had no reason to suspect that they had been
undervalued. Tr. 4-42:3-15, 60:10-15, 78:17-23, 93:8-12. The
December 2016 memorandum informed participants that the ESOP had
been terminated but did not apprise them of any specifics about
the valuation process, such as the fact that Argent had requested
a higher price or that Alexandrescu had threatened to use the
autoput. See Ex. 639. Defendants thus have failed to show that
Plaintiffs had actual knowledge of the alleged undervaluation of
Russelectric’s shares for purposes of the redemption transaction.
Finally, this Court previously held that the Clawback

Administration Claims would be time-barred only if Defendants
demonstrate that Plaintiffs “knew that the sale price was
significantly underreported after Defendants allegedly gave
themselves . . . transaction bonuses.” Bowers, 766 F. Supp. 3d at
148. Plaintiffs’ trial testimony reflects, in contrast, that they
were unaware of the bonuses and their impact on the clawback
amounts. Tr. 4-42:16-23, 62:5-7, 79:8-10, 94:11-14. The letter
sent by Alexandrescu did not notify participants of the bonuses.
See Ex. 791. The Clawback Administration Claims therefore are not
barred by the statute of limitations.
B. Release
Defendants next contend that Plaintiffs contractually

released their claims by signing severance agreements and a release
required as a condition of closing for the Siemens transaction.
The Court has rejected these arguments at previous stages of the
litigation. See Bowers, 717 F. Supp. 3d at 173-74; Bowers, 763 F.
Supp. 3d at 97-98; Bowers, 766 F. Supp. 3d at 149-50. The Court
incorporates by reference its previous discussions of the releases
at issue.
The releases signed as part of the Siemens transaction
purported to release all claims against Russelectric directors
(and various other entities and individuals) “arising from,
relating to or in connection with, either directly or indirectly,
the ESOP, the termination of the ESOP and/or the [Siemens sale].”

Ex. 785; see Exs. 787, 789, 791. They further provided that
“[n]otwithstanding the foregoing, the term ‘Released Claims’ shall
not include claims brought by Releasors with respect to the
performance of the obligations contemplated herein.” Ex. 785; see
Exs. 787, 789, 791.
The Court previously held that “Plaintiffs plausibly
allege[d] that they were completely unaware factually of the
unallocated stock and their rights to it, and thus that the
releases were void.” Bowers, 717 F. Supp. 3d at 174. The Court
further held that the release “contain[ed] limiting language that
explicitly exclude[d] claims related to the clawback provision
from the scope of the release.” Bowers, 763 F. Supp. 3d at 97.

Defendants provide no reason to deviate from these conclusions,
and several lines of testimony from the bench trial buttress them.
For example, Bowers was not told that bonuses had been deducted
from the gross sales price of Russelectric to Siemens. Tr. 4-56:4-
13.
Defendants also allude to severance agreements with releases
that were signed by Bowers, Gear-Cole, and Lorenzano (but not by
Tercy). Tr. 4-44:14-21, 45:8-10, 72:24-73:5, 74:9-18, 103:7-9,
104:9-19; see Exs. 786, 788. The severance agreements purported to
release all claims against Siemens “and its directors, employees,
officers, representatives, agents, shareholders, related entities,
affiliates, parents, subsidiaries, and divisions, or their

respective predecessors, successors, assigns, directors,
employees, officers, representatives, agents, and shareholders.”
Ex. 786; see Ex. 788.
The Court previously discussed, at the class certification
stage, a disagreement among the parties regarding whether the plain
language of the severance agreements released claims against
Russelectric directors (including John) or only previous Siemens
directors. See Bowers, 766 F. Supp. 3d at 149-50. In the Court’s
view, the severance agreements are best read as releasing claims
only against previous Siemens directors -- i.e., “predecessors” of
Siemens’ “directors.” Ex. 786; see Ex. 788.5 And in any event,
Defendants only mention this issue in passing in their pretrial

and posttrial briefing and do not meaningfully develop the
argument. They thus have not met their burden of demonstrating
that Bowers, Gear-Cole, Lorenzano, and similarly situated class
members have released their claims through the severance
agreements. See Med. Air Tech. Corp. v. Marwan Inv., Inc., 303

5 The bench trial testimony reflects that Gear-Cole did not believe
the release would apply to anyone not affiliated with Siemens, Tr.
4-75:9-11, and that Lorenzano did not understand what claims she
was releasing, Tr. 4-95:6-9, 103:7-9.
F.3d 11, 18 n.3 (1st Cir. 2002) (“[T]he party seeking to enforce
the release bears the burden of proof.”).
II. Claims Asserted Against John

The Court now addresses the four buckets of claims brought by
Plaintiffs against John: (1) the Clawback Negotiation Claims, (2)
the Redemption Transaction Claims; (3) the Clawback Administration
Claims; and (4) the equitable claims.
A. Clawback Negotiation Claims
Plaintiffs first challenge the decision to exclude
unallocated shares from the clawback provision. In Count III,
Plaintiffs claim that John breached fiduciary duties of prudence
and loyalty in violation of 29 U.S.C. § 1104(a)(1) and failed to
monitor Argent. In Count IV, Plaintiffs assert that John is subject
to cofiduciary liability under 29 U.S.C. § 1105(a) for knowingly
participating in a fiduciary breach committed by Argent.

The parties dispute whether John was a fiduciary with respect
to the Clawback Negotiation Claims and, if he was, whether he
breached his fiduciary duties. The Court tackles each of these
issues in turn. The Court then adjudicates Plaintiffs’ arguments
that John failed to monitor Argent and is subject to cofiduciary
liability.
1. Fiduciary Status
Two types of fiduciaries exist under ERISA: named and
functional fiduciaries. See Mass. Laborers’ Health & Welfare Fund
v. Blue Cross Blue Shield of Mass., 66 F.4th 307, 316 (1st Cir.
2023). Plaintiffs first contend that Russelectric’s Board
(including John) was a named fiduciary -- i.e., a person

“identified as” a fiduciary “in a plan instrument or pursuant to
a procedure specified in the plan,” id. (quoting 29 U.S.C.
§ 1102(a)) -- with respect to the Clawback Negotiation Claims.
The Court agrees. At the time of the clawback negotiation,
the ESOP’s trust agreement provided that Argent was “subject to
the direction of” Russelectric as a “directed trustee as described
in ERISA § 403(a).” Ex. 75; see Tr. 1-49:10-13, 49:21-23. That
provision of ERISA permits a trustee (here, Argent) to be made
“subject to the direction of a named fiduciary.” 29 U.S.C.
§ 1103(a)(1). The ESOP’s plan document, in turn, specified that
“[a]ny action authorized . . . to be taken by
[Russelectric] . . . under the Plan shall be by resolution of its

board of directors.” Ex. 590. These plan instruments thus
“identified” the Board as a named fiduciary with the power to
direct Argent and the “authority to control and manage the
operation and administration of the plan.” 29 U.S.C. § 1102(a).
That named fiduciary status is attributable to the individual Board
members, including John. See Stein v. Smith, 270 F. Supp. 2d 157,
168-69 (D. Mass. 2003) (holding that corporate committee’s named
fiduciary status was attributable to individual committee
members). Indeed, the Board passed a resolution that gave John the
authority to replace Argent at any time with a different ESOP
trustee. Tr. 1-24:4-15; Ex. 8.
Plaintiffs also argue that the Board was a functional

fiduciary. “A person is a functional fiduciary ‘with respect to a
plan to the extent . . . he exercises any discretionary authority
or discretionary control respecting management of such plan or
exercises any authority or control respecting management or
disposition of its assets.’” Mass. Laborers’ Health & Welfare Fund,
66 F.4th at 316 (emphasis omitted) (quoting 29 U.S.C.
§ 1002(21)(A)(i)). Because “a person can be a fiduciary ‘for some
purposes and not for others,’” courts must assess functional
fiduciary status with respect to the specific challenged
activities. Id. at 317 (quoting In re Fid. ERISA Fee Litig., 990
F.3d 50, 55 (1st Cir. 2021)).
The Court agrees that the Board, in addition to being a named

fiduciary, served as a functional fiduciary with respect to the
Clawback Negotiation Claims because it “exercise[d] . . .
discretionary authority or discretionary control respecting
management of” the ESOP. 29 U.S.C. § 1002(21)(A)(i). A party has
discretionary authority respecting plan management when it
“select[s] from a range of options in” managing the plan. Mass.
Laborers’ Health & Welfare Fund, 66 F.4th at 318. Here, the claims
at issue challenge the Board’s decision to include allocated
shares, but not unallocated shares, in the clawback provision. The
choice to exclude unallocated shares was a discretionary one.
2. Breach of Fiduciary Duties

Having determined that John, as a member of the Board, was a
fiduciary with respect to the Clawback Negotiation Claims, the
Court now must analyze whether he breached any fiduciary duties.
“A claim for breach of a fiduciary duty under ERISA includes
proving a breach, a loss, and the causal connection between the
two.” Parmenter v. Prudential Ins. Co. of Am., 93 F.4th 13, 19
(1st Cir. 2024). Plaintiffs must “show[] a breach of fiduciary
duty and loss to the plan,” at which point “the burden shifts to
the fiduciary to prove that such loss was not caused by its
breach.” Brotherston v. Putnam Invs., LLC, 907 F.3d 17, 39 (1st
Cir. 2018).
“ESOP fiduciaries are subject to the same duty of prudence

that applies to ERISA fiduciaries in general, except that they
need not diversify the fund’s assets.” Fifth Third Bancorp v.
Dudenhoeffer, 573 U.S. 409, 412 (2014). Under ERISA’s duty of
prudence, “a fiduciary must act ‘with the care, skill, prudence,
and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such
matters would use.’” Brotherston, 907 F.3d at 30 (quoting 29 U.S.C.
§ 1104(a)(1)(B)). “[T]he content of the duty of prudence turns on
‘the circumstances . . . prevailing’ at the time the fiduciary
acts.” Barchock v. CVS Health Corp., 886 F.3d 43, 44 (1st Cir.
2018) (second alteration in original) (quoting Dudenhoeffer, 573
U.S. at 425).

Under ERISA’s duty of loyalty, “fiduciaries ‘shall discharge
their duties with respect to a plan “solely in the interest of the
participants and beneficiaries,” that is, “for the exclusive
purpose of (i) providing benefits to participants and their
beneficiaries; and (ii) defraying reasonable expenses of
administering the plan.”’” Brotherston, 907 F.3d at 39-40 (quoting
Pegram v. Herdrich, 530 U.S. 211, 223-24 (2000)); see 29 U.S.C.
§ 1104(a)(1)(A). “[T]he duty of loyalty requires the fiduciary to
‘deal fairly and honestly with beneficiaries’ so as ‘to ensure
that a plan receives all funds to which it is entitled.’”
Cunningham v. Cornell Univ., 604 U.S. 693, 696 (2025) (citations
omitted) (first quoting Varity Corp. v. Howe, 516 U.S. 489, 506

(1996); and then quoting Cent. States, Se. & Sw. Areas Pension
Fund v. Cent. Transp., Inc., 472 U.S. 559, 571 (1985)). In
analyzing a claim of breach of the duty of loyalty, courts “ask[]
whether the fiduciary’s ‘operative motive was to further its own
interests.’” Brotherston, 907 F.3d at 40 (quoting Ellis v. Fid.
Mgmt. Tr. Co., 883 F.3d 1, 6 (1st Cir. 2018)).
Plaintiffs contend that John breached the duties of prudence
and loyalty by failing to include unallocated shares in the
clawback provision. The Court disagrees. Although John voted to
approve the clawback agreement, Tr. 5-14:14-16, he recused himself
from the negotiation, instead allowing Long to take the lead for
Russelectric. Tr. 1-42:15-20; Tr. 2-49:20-22; Tr. 4-112:1-2,

115:13-18. More importantly, even if John had been personally
involved in the formulation of the clawback provision (he was not),
Plaintiffs have failed to show that excluding unallocated shares
from the provision was imprudent or disloyal.
At the outset, the Court notes that the Board’s assent to
Argent’s request for a three-year clawback provision was a prudent
act that was beneficial to the ESOP’s participants. The plan
documents did not provide for a clawback, Tr. 1-24:20-24, and at
the time of the clawback negotiation, clawbacks were less common
than they are today in sales of privately held stock, Tr. 1-31:12-
32:3. Argent viewed the three-year term of the clawback provision
as very favorable to the ESOP. Tr. 4-25:4-6. Long testified that

in more than fifty clawback provisions he saw in his career, none
of them had a term that long, Tr. 2-57:10-23, and Plaintiffs’
experts both acknowledged that the length of the clawback was
appropriate, Tr. 6-68:22-69:6, 121:17-122:2.
As to the treatment of unallocated shares, Argent never
requested that the unallocated shares be included in the clawback
provision, and Argent had never heard of such an arrangement. Tr.
4-22:4-8. Long, John, and Russelectric’s ERISA counsel likewise
testified that the thought of including unallocated shares in the
clawback never even occurred to them because they had never heard
of unallocated shares being included in such a provision. Tr. 1-
29:20-23, 32:4-8, 42:15-21; Tr. 2-5:16-22, 57:10-23, 91:11-19,

92:4-13, 98:7-13; Tr. 4-114:23-25. The testimony reflected that
including unallocated shares in the clawback would have been
atypical given that unallocated shares act as collateral for the
unpaid ESOP loan balance. Tr. 1-32:25-33:3. If the value of the
unallocated shares had exceeded the loan balance at the time of a
redemption of ESOP stock, the surplus value would have been
allocated to participants and thus included in a future clawback.
Ex. 245.
Expert testimony at the bench trial was not to the contrary.
Defendants’ expert Richard May6 had never heard of a clawback
agreement including unallocated shares. Tr. 9-100:15-17.
Plaintiffs’ expert Kelly Driscoll7 testified that although other

types of agreements often protect unallocated shares, she has not
seen a clawback that includes unallocated shares. Tr. 6-37:16-

6 May has a graduate business degree and works at American Working
Capital, providing advisory services to company boards on
corporate governance issues. Tr. 9-90:1-23. He has advised various
boards in ESOP-related transactions. Tr. 9-90:24-91:19.
7 Driscoll is an attorney who has worked primarily with State
Street Global Advisors, representing the company’s defined
contribution business (with a focus on ESOPs) and leading its
independent fiduciary business. Tr. 6-28:10-17. She was personally
involved in negotiating various ESOP stock transactions. Tr. 6-
29:7-10.
38:6, 39:18-20, 40:17-41:7. And Plaintiffs’ expert Dana Messina8
testified he has not seen a clawback provision either expressly
include or exclude unallocated shares. Tr. 6-114:25-115:5, 119:10-

21. The Court finds that the weight of the evidence supports
Defendants’ position that excluding unallocated shares was not a
breach of fiduciary duties.
Plaintiffs resist this conclusion with several arguments.
First, Plaintiffs’ experts pointed out that the circumstances here
were unusual in that an ESOP was being terminated relatively early
in its lifespan, when most of its shares remained unallocated. Tr.
6-31:1-3, 39:18-20; Tr. 6-106:14-107:2. But it is Plaintiffs’
burden to demonstrate a breach of fiduciary duties, see
Brotherston, 907 F.3d at 39, and they fail to show that including
only allocated shares in a clawback provision -- even in an unusual
circumstance such as this one –- constitutes an insufficiently

prudent and loyal course of action.
Second, Plaintiffs point out that the clawback negotiation
took place approximately eight months before the redemption
transaction, such that no one knew whether the unallocated shares
would be underwater (and thus expended in full to repay a portion

8 Messina has a business degree, has worked in investment banking,
and was the CEO of Steinway for fifteen years. Tr. 6-102:21-103:19.
He also has consulted with the Department of Labor for several
decades, providing expert testimony and investigative work for
ESOP-related valuations. Tr. 6-103:22-104:13.
of the outstanding ESOP loan balance) or would exceed the loan
balance. Tr. 1-35:16-36:6. But the testimony reflects that the
clawback agreement was executed early in the year at Argent’s

request. Tr. 2-119:2-14. And in any event, Plaintiffs fail to
explain why the uncertainty as to the unallocated shares’ value
would change the calculus on whether it was customary or
appropriate to include them in a clawback provision.
Third, Plaintiffs highlight Long’s comment that he “expected
[Martin] to have counsel review” the clawback provision, Ex. 732,
and Russelectric’s corporate counsel’s statement that the
negotiation “was easier than [he] expected,” Ex. 729. These
comments do not indicate that the Board viewed the clawback
provision as unfavorable to the ESOP participants. And the Board’s
comments were not related to the exclusion of unallocated shares,
which is “the action subject to complaint.” Pegram, 530 U.S. at

226.
3. Duty to Monitor and Cofiduciary Liability
In addition to having fiduciary duties of its own, the Board
“had an obligation to monitor [Argent] to prevent [it] from
approving an unfair deal” with respect to the clawback negotiation.
Bowers, 717 F. Supp. 3d at 175. That is because board members “who
appoint plan administrat[ors] have an ongoing fiduciary duty under
ERISA to monitor the activities of their appointees.” Howell v.
Motorola, Inc., 633 F.3d 552, 573 (7th Cir. 2011). In such
circumstances, “individual [board] members can be found
individually liable for a failure to monitor the administrator of
the plan.” Bowers, 717 F. Supp. 3d at 175; see id. (“Implicit in

the power to appoint fiduciaries is the duty to monitor and ‘to
take action upon discovery that the appointed fiduciaries are not
performing properly.’” (quoting Kling v. Fid. Mgmt. Tr. Co., 323
F. Supp. 2d 132, 142 (D. Mass. 2004))). This duty to monitor,
however, does not “require every appointing Board member to review
all business decisions of [p]lan administrators,” as such a
stringent requirement “would defeat the purpose of having trustees
appointed to run a benefits plan in the first place.” Howell, 633
F.3d at 573.
Similarly, a fiduciary may be held liable under ERISA’s
cofiduciary provisions
(1) if he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of
[an]other fiduciary, knowing such act or omission
is a breach;

(2) if, by his failure to comply with [his fiduciary
duties] in the administration of his specific
responsibilities which give rise to his status as
a fiduciary, he has enabled such other fiduciary to
commit a breach; or

(3) if he has knowledge of a breach by such other
fiduciary, unless he makes reasonable efforts under
the circumstances to remedy the breach.
29 U.S.C. § 1105(a). In other words, “[c]o-fiduciary liability
inheres if a fiduciary knowingly participates in or conceals
another fiduciary’s breach, enables such other to commit a breach,
or learns about such a breach and fails to make reasonable efforts
to remedy it.” Parmenter, 93 F.4th at 26 (quoting Beddall v. State

St. Bank & Tr. Co., 137 F.3d 12, 18–19 (1st Cir. 1998)). Notably,
however, § 1105(a) “contemplates active steps in furtherance of
the breach”; where there is no evidence that a fiduciary “knowingly
participated in, concealed, enabled, or failed to intercede in any
way to influence [the other fiduciary’s] decision,” cofiduciary
liability will not attach. Id. at 27.
Accordingly, under both a failure-to-monitor theory and a
cofiduciary liability claim, Plaintiffs must demonstrate (among
other things) that Argent itself breached a fiduciary duty or
otherwise acted improperly. Plaintiffs have failed to make that
showing with respect to the Clawback Negotiation Claims. Argent
proactively requested and obtained a three-year clawback

provision, which it viewed as favorable to the ESOP. Tr. 1-28:15-
20, 29:4-12; Tr. 4-25:4-6. The Board felt that Argent was properly
performing its fiduciary duties in advocating for the provision.
Tr. 1-20:9-19.9 And the testimony of Argent witnesses reflected

9 John did not personally monitor the clawback negotiation, instead
allowing Long to do so on the Board’s behalf. Tr. 1-42:15-20; Tr.
2-49:20-22; Tr. 4-112:1-2, 115:19-21, 115:13-18. Plaintiffs do not
contend that every Board member must individually monitor the
appointed fiduciary in order to collectively satisfy the Board’s
duty to monitor. In any event, Argent committed no wrongdoing in
the clawback negotiation.
that the clawback provision was discussed internally, Tr. 4-10:5-
15; Martin Dep. at 53:10-54:03; that Argent had its own counsel,
Tr. 4-27:15-16; and that Argent believed the clawback negotiation

was conducted fairly, Tr. 4-27:10-14.
Because Plaintiffs have failed to meet their burden of
demonstrating that John breached fiduciary duties, failed to
monitor Argent, or is subject to cofiduciary liability, judgment
will enter for John with respect to the Clawback Negotiation Claims
in Counts III and IV.
B. Redemption Transaction Claims
Plaintiffs next claim that John violated ERISA in connection
with the November 2016 redemption transaction. In Count I,
Plaintiffs assert that the redemption transaction constituted a
prohibited transaction between the ESOP and parties in interest in
violation of 29 U.S.C. § 1106(a)(1)(A) and (D). In Count II,

Plaintiffs argue that the redemption transaction constituted a
prohibited transaction between the ESOP and fiduciaries in
violation of 29 U.S.C. § 1106(b)(1) and (3). In Count III,
Plaintiffs claim that John breached fiduciary duties of prudence
and loyalty in violation of 29 U.S.C. § 1104(a)(1) and failed to
monitor Argent. And in Count IV, Plaintiffs assert that John is
subject to cofiduciary liability under 29 U.S.C. § 1105(a) for
knowingly participating in a fiduciary breach committed by Argent.
ERISA’s prohibited transactions provisions “supplement[] the
fiduciary’s general duty of loyalty . . . by categorically barring
certain transactions deemed ‘likely to injure the pension plan.’”

Brotherston, 907 F.3d at 25 (quoting Harris Tr. & Sav. Bank v.
Salomon Smith Barney Inc., 530 U.S. 238, 241-42 (2000)); see
Cunningham, 604 U.S. at 697. As relevant here, ERISA prohibits a
fiduciary from “caus[ing] the plan to engage in a transaction, if
he knows or should know that such transaction constitutes a direct
or indirect . . . (A) sale or exchange, or leasing, of any property
between the plan and a party in interest; . . . [or] (D) transfer
to, or use by or for the benefit of a party in interest, of any
assets of the plan.” 29 U.S.C. § 1106(a)(1)(A), (D). As also
relevant, ERISA prohibits a fiduciary from “deal[ing] with the
assets of the plan in his own interest or for his own account” and
from “receiv[ing] any consideration for his own personal account

from any party dealing with such plan in connection with a
transaction involving the assets of the plan.” Id. § 1106(b)(1),
(3).
Defendants do not dispute that if John is a fiduciary, the
redemption transaction was a prohibited transaction under these
provisions, as it redistributed ESOP assets to Russelectric and to
John. See id. § 1002(14)(A), (C) (defining “party in interest” to
include “any fiduciary” and the “employer” of plan participants).
Defendants maintain, however, that John was not a fiduciary with
respect to the redemption transaction. They further contend that
even if John was a fiduciary, an exception to the prohibited
transaction provisions applies because the redemption transaction

was “for adequate consideration.” Id. § 1108(e)(1); see
Brotherston, 907 F.3d at 25 (noting that “the prohibition of [§]
1106(a)(1) on transactions with parties-in-interest applies
‘[e]xcept as provided in [§] 1108’” (second alteration in original)
(quoting 29 U.S.C. § 1106(a)(1))); Solis v. Webb, 931 F. Supp. 2d
936, 947 (N.D. Cal. 2012) (noting that § 1108(e) also provides “a
statutory exemption to [§ 1106(b)’s self-dealing] restriction with
respect to ESOPs”).
The analysis under Count III, which alleges a breach of the
fiduciary duties of prudence and loyalty, amounts to the same
inquiries because “the focus of the adequate-consideration inquiry
rests on the conduct of a fiduciary, as judged by ERISA’s ‘prudent

man’ standard of care.” Brundle ex rel. Constellis Emp. Stock
Ownership Plan v. Wilmington Tr., N.A., 919 F.3d 763, 770 (4th
Cir. 2019); accord, e.g., Perez v. Bruister, 823 F.3d 250, 263
(5th Cir. 2016); Howard v. Shay, 100 F.3d 1484, 1488 (9th Cir.
1996). The questions for the Court under Counts I-III, therefore,
are (1) whether John was a fiduciary, and (2) whether the
redemption transaction was for adequate consideration. The Court
addresses each of these questions in turn and then resolves
Plaintiffs’ duty-to-monitor theory and their claim of cofiduciary
liability under Count IV.
1. Fiduciary Status

Because “a person can be a fiduciary ‘for some purposes and
not for others,’” the Court must newly determine whether John acted
as a fiduciary with respect to the Redemption Transaction Claims.
Mass. Laborers’ Health & Welfare Fund, 66 F.4th at 317 (quoting In
re Fid. ERISA Fee Litig., 990 F.3d at 55). At the outset, the Court
notes that the Board (and John) was no longer a named fiduciary at
the time of the redemption transaction. Rather, the redemption
transaction occurred under an engagement agreement that conferred
“discretionary trustee” status on Argent, such that Argent
“assume[d] the fiduciary responsibility for determining . . .
whether the price the [c]ompany pays the ESOP for the stock in the
[p]roposed [t]ransaction is adequate consideration.” Ex. 124; see

also Ex. 75 (previously designating Argent as a directed trustee
“[o]ther than to the extent [Argent] is appointed . . . as [a]
[d]iscretionary fiduciary”).
Nevertheless, the Court still must assess whether John acted
as a functional fiduciary with respect to the Redemption
Transaction Claims. It is true that John testified that he was
recused from the redemption transaction price negotiations, Tr. 2-
49:13-15; Tr. 8-53:13-20, and was not involved in communicating
with Argent or Prairie Capital, instead delegating that task to
Alexandrescu, Tr. 5-39:15-40:3, 68:1-10. But the Board (including
John) ratified and authorized all actions taken by Alexandrescu
with respect to the redemption transaction. Tr. 1-57:6-9; Ex. 383.

Moreover, John signed off on the $134-per-share redemption price.
Tr. 4-124:21-23. Although “an employer’s decision whether to
terminate an ERISA plan is a settlor function immune from ERISA’s
fiduciary obligations,” Beck v. PACE Int’l Union, 551 U.S. 96, 101
(2007), the Redemption Transaction Claims do not challenge John’s
decision to terminate the ESOP -- rather, they challenge his role
in determining what value was received by plan participants upon
termination. John approved the level of compensation and thereby
exercised authority over the management of plan assets. See 29
U.S.C. § 1002(21)(A)(i). He thus was “wear[ing] [a] fiduciary hat”
with respect to the Redemption Transaction Claims. Pegram, 530
U.S. at 225.
2. Adequate Consideration

The Court next must determine whether Defendants have shown
that the redemption transaction was for “adequate consideration.”
29 U.S.C. § 1108(e)(1). A transaction is for adequate consideration
if the price paid was “the fair market value of the asset as
determined in good faith by the trustee or named fiduciary.” Id.
§ 1002(18). Courts also assess whether the fiduciary acted
prudently, see Brundle, 919 F.3d at 770, and whether the
consideration was “the product of a determination made by the
fiduciary in good faith,” id. at 770 n.2 (quoting Proposed
Regulation Relating to the Definition of Adequate Consideration,
53 Fed. Reg. 17632, 17633 (proposed May 17, 1988)); see also id.

(“[I]n practice, the ‘fair market value’ inquiry overlaps
considerably with the ‘good faith’ inquiry.” (alteration in
original) (quoting Henry v. Champlain Enters., Inc., 445 F.3d 610,
619 (2d Cir. 2006) (Sotomayor, J.))). Because the § 1108(e)
exception is an affirmative defense to “an otherwise prohibited
transaction, the fiduciary bears the burden of proving by a
preponderance of the evidence that the sale was for adequate
consideration.” Id. at 770; see Cunningham, 604 U.S. at 696 (“[I]t
is defendant fiduciaries who bear the burden of pleading and
proving that a § 1108 exemption applies to an otherwise prohibited
transaction under § 1106.”).
Defendants have met their burden of demonstrating that the

redemption transaction was for adequate consideration and thus was
compliant with fiduciary obligations and exempt from ERISA’s
prohibited transaction provisions. See, e.g., Brundle, 919 F.3d at
770. The evidence from the bench trial supports this conclusion.
First, the Board was aware that Argent retained Prairie
Capital to conduct a new financial valuation in support of the
redemption transaction negotiations. Tr. 1-60:21-61:9. “Having
independent financial advice from a reputable firm is a good start
to a fair market value determination . . . .” Brundle ex rel.
Constellis Emp. Stock Ownership Plan v. Wilmington Tr. N.A., 241
F. Supp. 3d 610, 633 (E.D. Va. 2017), aff’d, 919 F.3d 763. Still,
“[t]he fiduciary must (1) investigate the expert’s qualifications,

(2) provide the expert with complete and accurate information, and
(3) make certain that reliance on the expert’s advice is reasonably
justified under the circumstances.” Howard, 100 F.3d at 1489
(citations omitted). “[T]he fiduciary is required to make an
honest, objective effort to read the valuation, understand it, and
question the methods and assumptions that do not make sense.” Id.
at 1490.
Here, the Board understood that Prairie Capital was a well-
known valuation firm that had performed hundreds of ESOP
valuations. Tr. 1-14:9-11. Defendants’ valuation expert, Jeffrey
Tarbell,10 viewed Prairie Capital’s reputation as “[e]xcellent.”
Tr. 8-136:4. Throughout the redemption valuation process,

Russelectric’s management provided Prairie Capital all the
financial information that Prairie Capital requested, never
concealing information or providing inaccurate data. Fiore Dep. II
at 89:05-90:01; Tr. 2-43:3-9, 44:5-7, 46:1-7, 46:17-20; Tr. 8-
52:2-10; Ex. 542. Alexandrescu provided Prairie Capital the same

10 Tarbell has a business degree, with an emphasis on finance, and
works in investment banking at Houlihan Lokey. Tr. 8-125:18-126:3.
He specializes in the valuation of closely held companies, with
approximately half of his work relating to ERISA and ESOPs. Tr. 8-
126:4-11.
budget projections that he gave to the Board, and he kept Prairie
Capital informed about new products, sales channels, markets,
aftermarket sales opportunities, and lean manufacturing

initiatives. Tr. 8-41:11-45:13; Ex. 188. Although the Board did
not review Prairie Capital’s valuation, that is because Argent
refused to provide it to the Board (despite Alexandrescu’s repeated
requests) and instead determined that keeping the valuation
confidential would best serve the ESOP’s interests. Tr. 8-54:7-8;
Fiore Dep. II at 112:17-113:18.
Next, Defendants have demonstrated that the financial
projections provided to Prairie Capital were appropriate. Argent
reviewed the financial data underlying the June 30, 2016, annual
valuation and determined that they were satisfactory. Tr. 4-32:2-
25. Those financial projections were largely prepared in September
and October 2016. Tr. 8-36:12-17, 38:6-21; Ex. 99. The

determination by Russelectric’s management and Board that the same
projections were applicable in November 2016 was reasonable given
the short amount of time that had elapsed. Tr. 2-45:21-25; Tr. 3-
45:3-7, 45:14-19. Indeed, Prairie Capital independently concluded
that no major changes had occurred between September and November
2016 to justify substantially increasing financial forecasts.
Fiore Dep. II at 39:13-40:01, 81:17-24, 95:05-10. Alexandrescu
also provided Prairie Capital with updated figures regarding the
company’s cash on hand and pension liability. Tr. 1-91:2-15, 92:16-
18; Tr. 8-57:2-8. Defendants’ valuation expert, Tarbell, testified
that Prairie Capital’s financial projections were reasonable. Tr.
9-16:14-19.

Plaintiffs object that the financial projections provided to
Prairie Capital did not account for the various positive
developments occurring at Russelectric. But the trial testimony
reflects that most of these developments were only beginning to
percolate in late 2016. Alexandrescu was hired in May 2016 and did
not build out the company’s new management team until the fall of
2016. Tr. 1-76:1-3; Tr. 2-21:25, 54:24-55:1; Tr. 8-17:8-20, 18:9-
16. The improvements he made to the company’s financial reporting
structure, product base, sales force, aftermarket sales, and lean
manufacturing took time to take effect. Tr. 1-84:2-13; Tr. 2-22:4-
23:1, 2-23:9-15; Tr. 5-76:3-6; Tr. 8-12:20-13:8, 13:23-14:17.
Russelectric’s backlog began to increase in October 2016, but many

of its new sales and bookings did not come to fruition until mid-
2017. Tr. 1-76:24-77:1, 77:5-8; Tr. 8-20:1-10, 23:2-4. Given that
Alexandrescu’s corporate reforms did not begin to have an impact
until late 2016 and that the recent annual valuation had already
taken into account some of these anticipated changes, it was
reasonable for the financial projections to stay largely the same.
Plaintiffs also take issue with Russelectric’s tough-guy
negotiating posture and specifically with Alexandrescu’s threat to
use the autoput. Alexandrescu acted as a counterparty to Argent in
the redemption transaction, and Argent and Prairie Capital viewed
him as such. Tr. 4-17:6-7; Fiore Dep. II at 112:17-113:18. But
there is no evidence that John had any involvement in the autoput

discussions or that this negotiating tactic resulted in an
inadequate redemption value. On the contrary, the autoput was never
used, Tr. 2-51:12-14, and the ultimate redemption value of $134
was above the midpoint of Prairie Capital’s valuation range of
$120 to $141, Tr. 1-109:7-13; Tr. 4-37:1-19; Ex. 776. Although
Argent had initially requested the higher value of $165, it did
not provide any information to support this figure, which it simply
viewed as a “really high price to start a negotiation.” Tr. 4-
17:6-7; see Tr. 1-109:14-20; Tr. 4-17:22-18:5; see also Cooke v.
Lynn Sand & Stone Co., 70 F.3d 201, 205 (1st Cir. 1995) (noting
that ERISA does not necessarily require “maximiz[ing] the award to
the beneficiary”).

Next, Plaintiffs point to several outside offers to buy
Russelectric, arguing that they demonstrate that the redemption
value was underestimated. First, Plaintiffs emphasize that
Alexandrescu calculated a share value higher than $134 in relation
to an offer from Western Commerce in February 2017. Tr. 3-64:2-7;
Tr. 8-112:18-25. But witnesses explained at trial that the
comparison was inapt because the redemption valuation assessed the
fair market value of the ESOP’s shares (a noncontrolling interest),
while the Western Commerce estimate was for an 100% interest and
therefore included a premium for a controlling interest and the
ability to strip the company of its liabilities (such as the
company’s defined benefit plan) and operating costs. Tr. 3-65:7-

16; Tr. 8-117:14-17, 119:3-14. Plaintiffs also highlight offers
received from AMETEK and Socomec in the summer of 2017. Tr. 2-
69:5-13. But between November 2016 and the time of these offers,
various improvements had taken effect at Russelectric, including
new product lines and lean manufacturing. Tr. 3-72:22-73:9.
Prairie Capital’s fairness opinion also weighs toward finding
that adequate consideration was paid for the ESOP’s shares. The
fairness opinion concluded that the price of $134 per share was
“not less than ‘fair market value’ and constitute[d] ‘adequate
consideration’” and that “[t]he [t]ransaction, taken as a whole,
[wa]s fair to the [ESOP] from a financial point of view.” Ex. 636
(quoting 29 U.S.C. § 1002(18)). The Board reviewed the fairness

opinion when consummating the transaction. Tr. 2-56:8-13. One of
Plaintiffs’ experts agreed that requesting a fairness opinion was
a prudent action by Argent, Tr. 6-92:1-5, and the Court likewise
finds that the Board acted sensibly by reviewing the opinion.
The bulk of Plaintiffs’ objections to the $134-per-share
consideration was presented by their valuation expert, Dana
Messina. Messina conducted his own valuation and concluded that
Russelectric’s shares were worth approximately $436 per share at
the time of redemption. Tr. 7-71:10-12. Messina offered various
critiques of Prairie Capital’s valuation. Although the Court finds
Messina qualified and credible, his critiques ultimately do not
persuade the Court that $134 per share constituted inadequate

consideration for the following reasons.
Messina first testified that Prairie Capital failed to take
into account increased demand and backlog of orders. Tr. 6-142:8-
11. But he agreed that Russelectric provided accurate backlog data:
“[T]here were criticisms I could make of the company, but not that
they didn’t give Prairie [Capital] the numbers.” Tr. 7-129:20-21;
see Tr. 7-129:13-21. Although Messina faulted the Board for failing
to correct the errors he perceived in Prairie Capital’s backlog
calculations, he acknowledged that the Board never received the
redemption valuation because Argent and Prairie Capital chose not
to share it. Tr. 7-130:1-5, 131:22-25. Furthermore, Prairie
Capital did analyze the data, including by differentiating between

released and unreleased backlog. Fiore Dep. II at 100:18-102:04.
Next, Messina stated that Prairie Capital should have
accounted for the anticipated decrease in pension expenses due to
Russelectric freezing its defined benefit plan. Tr. 6-133:8-12,
136:11-19, 137:19-20, 142:21-24. But Prairie Capital reasoned that
the pension funds were being relocated to other expenses such as
an employer contribution to 401(k) plans. Tr. 7-56:19-24, 58:19-
59:2. Prairie Capital’s witness maintained that no error in the
pension liability calculations had been made. Fiore Dep. I at
155:06-156:16. And again, Russelectric gave Prairie Capital the
necessary information about the upcoming decrease in pension
payments. Tr. 7-59:3-6.

Messina also testified that Prairie Capital failed to account
for improved margins due to lean manufacturing efficiencies. Tr.
6-144:22-25, 145:8-21, 146:12-21. But Messina admitted in his
deposition that he did not know which aspects of the lean
manufacturing initiative had been completed by November 2016. Tr.
7-72:8-22. And the trial record reflects that many of those
improvements were made in late 2016 or 2017; indeed, as of October
2016, when Tejada toured Russelectric’s facilities, he still felt
as if he was “stepping back in a time capsule.” Tr. 7-72:5; see
Tr. 7-71:23-72:7.
One of Messina’s primary critiques of Prairie Capital related
to its use of a 16% discount rate in its discounted cash flow

(“DCF”) analysis. Tr. 6-148:5-19. Messina faulted Prairie Capital
for assuming an all-equity capital structure rather than an
efficient capital structure of a mixture of equity and cash. Tr.
6-148:25-149:21, 150:20-24. But Prairie Capital’s approach was
based on the fact that Russelectric in fact used an all-equity
capital structure, Tr. 6-148:25-149:21, and Messina acknowledged
that a hypothetical buyer of a 30% stock interest -- i.e., the
amount of shares held by the ESOP -- would not be able to change
a company’s capital structure. Tr. 7-76:7-12. Defendants’
valuation expert, Tarbell, testified that a DCF analysis must use
the perspective of this hypothetical willing buyer and seller, and
Prairie Capital’s corporate representative testified that it used

that approach. Tr. 8-137:2-9, 137:18-138:4; Tr. 9-10:13-18, 11:8-
11; Hughes Dep. at 33:01-12. That hypothetical-willing-buyer
approach is the method discussed in Valuing a Business, a valuation
treatise contributed to by Tarbell which Messina admitted is relied
upon as an authoritative text on appraisal practices by various
professionals. Tr. 7-44:11-17; Tr. 8-130:4-11; Hughes Dep. at
33:01-12. Messina further admitted that the choice of discount
rate is a “reasonable point of debate.” Tr. 7-79:24-25. In
addition, Tarbell’s valuation methods followed the Uniform
Standards of Professional Appraisal Practice, while Messina’s
valuation approach was not tethered to any uniform valuation
standards. Tr. 7-43:10-44:10; Tr. 8-134:8-12.

Similarly, Messina objected to Prairie Capital valuing the
ESOP’s assets on a minority basis. Tr. 6-151:6-15. Prairie Capital
viewed a control premium as unwarranted because the ESOP owned
only a 30% stake, Fiore Dep. II at 105:18-106:05, while Messina
viewed the minority discount as inappropriate because the ESOP was
selling its shares to a majority holder (i.e., the company), Tr.
6-151:11-15, 152:10-14. While this is a reasonable point of view,
Prairie Capital’s approach was deemed correct by Tarbell, who
stressed that the ESOP’s block would be viewed by a hypothetical
willing buyer as a noncontrolling investment with limited
marketability. Tr. 9-54:17-20. The Court again finds that it was
not imprudent for Prairie Capital to use the hypothetical-willing-

buyer approach.
Another critique levied by Messina related to Prairie
Capital’s use of the guideline company method (an alternative
valuation method to DCF). Tr. 6-147:25-148:4. Messina testified
that Prairie Capital was not provided with information about M&A
activity in the industry or about offers to buy Russelectric. Tr.
6-152:15-153:9. This criticism gives pause. But the only industry
M&A activity that Alexandrescu was aware of at the time was the
sale of ASCO to a private equity firm in 2016 (the year before its
sale to Schneider Electric), which was public information that
Alexandrescu believed Prairie Capital actively monitored. Tr. 8-
106:25-107:21. Although Alexandrescu should have shared more

information about M&A activity with Prairie Capital, the Court
cannot conclude that this shortcoming substantially affected
Prairie Capital’s valuation, especially given that Prairie Capital
conducted its own research into industry M&A activity. Hughes Dep.
at 61:18-62:08.
In short, Defendants have met their burden of proving that
they acted prudently in determining the compensation paid to the
ESOP. The evidence supports Prairie Capital’s conclusion that
Russelectric’s stock should have been valued in the range of $120
to $141 -- i.e., relatively close to the 2016 annual valuation of
$121, see Exs. 99, 472 -- rather than the $436 figure estimated by
Messina. The Court takes into account that Messina had performed

a separate analysis of Russelectric on behalf of the Department of
Labor that used different approaches from his expert report, albeit
under different circumstances and with much less time. Tr. 7-
85:18-87:7, 110:25-111:7. While Messina had some fair criticisms,
the Court is mindful that the cornerstone of the adequate-
consideration analysis is “the conduct of a fiduciary, as judged
by ERISA’s ‘prudent man’ standard of care.” Brundle, 919 F.3d at
770. There is no evidence that the Board did not believe that $134
was a fair valuation of Russelectric’s stock (or even slightly
above fair value), Tr. 1-65:9-11, and that Argent’s offer of $165
was unreasonably high, Tr. 1-64:25-65:6. The Board provided all
financial information that Prairie Capital requested. Fiore Dep.

II at 89:05-90:01. The ultimate sale price of $134 was above the
midpoint of Prairie Capital’s valuation range, Tr. 1-109:7-13; Tr.
4-37:1-19; Ex. 776; was deemed to be adequate consideration in
Prairie Capital’s fairness opinion, Ex. 636; and was within
Tarbell’s valuation range, Tr. 9-26:20-22. All of these facts
reflect a prudent and loyal process that produced a value
constituting adequate consideration. Defendants thus have met
their burden of showing that the § 1108(e) exemption to ERISA’s
prohibited-transaction provisions applies.
3. Duty to Monitor and Cofiduciary Liability
The Court briefly addresses Plaintiffs’ duty-to-monitor
theory and claim of cofiduciary liability with respect to the

Redemption Transaction Claims. As with the Clawback Negotiation
Claims, these theories of liability fail because Plaintiffs have
failed to show any fiduciary breaches or wrongdoing by Argent
during the redemption transaction.
As described above, Argent hired Prairie Capital in order to
obtain a fair valuation of the ESOP’s shares. Tr. 1-60:21-61:9.
Argent reviewed Prairie Capital’s valuation and determined that
Prairie Capital had applied appropriate financial adjustments. Tr.
4-32:2-25. After learning that Prairie Capital’s analysis valued
the shares in the range of $120 to $141, Argent proposed a $165
share price to Russelectric in attempt to obtain a premium for the
plan participants. Tr. 1-64:25-65:2; Tr. 4-17:22-18:5. These

efforts resulted in a redemption price above the midpoint of
Prairie Capital’s valuation range. Tr. 4-37:1-19; Ex. 776. Argent
then had an experienced ERISA attorney negotiate the redemption
agreement with Russelectric. Tr. 2-27:11-14, 104:12-24. Finally,
Argent procured a fairness opinion in order to confirm that the
amount paid to plan participants was adequate. Tr. 2-31:21-32:1.
These actions were consistent with a prudent fiduciary process
that was loyal to the ESOP’s participants.
The Board was well aware of Argent’s actions and viewed them
as constituting an appropriate fiduciary process. Although John
was not personally involved in the redemption price negotiation or

in monitoring Argent, Tr. 2-49:13-15; Tr. 4-129:6-11, he oversaw
Alexandrescu and was kept in the loop, Tr. 4-118:25-119:1; Tr. 5-
17:1-4, 39:8-14. Long served as Alexandrescu’s point of contact,
Tr. 8-53:13-20, thus ensuring that the Board monitored Argent and
the redemption transaction generally.
In summary, Plaintiffs have failed to meet their burden of
showing a fiduciary breach by John or any wrongdoing by Argent,
and Defendants have met their burden of demonstrating that the
redemption transaction was for adequate consideration. Judgment
therefore will enter for John with respect to the Redemption
Transaction Claims in Counts I-IV.
C. Clawback Administration Claims

Finally, Plaintiffs take issue with the administration of the
clawback provision during the Siemens transaction and specifically
with John’s role in awarding bonuses that reduced the clawback
payments to participants. In Count VII, Plaintiffs claim that John
breached fiduciary duties in violation of 29 U.S.C. § 1104(a)(1)
by diverting sale proceeds to himself, his family, and certain
executives. In Count VIII, Plaintiffs assert that John caused the
ESOP to engage in a prohibited transaction with parties in interest
and fiduciaries in violation of 29 U.S.C. § 1106(a)(1)(D) and
(b)(1) and (3). And in Count IX, Plaintiffs invoke 29 U.S.C.
§ 1132(a)(1)(B) to request plan benefits allegedly owed to them by
John.

The Court first addresses Defendants’ argument that ERISA
does not apply to the Clawback Administration Claims. The Court
then determines whether John acted as a functional fiduciary with
respect to those claims. Next, the Court analyzes whether
Plaintiffs have shown breaches of fiduciary duties and, if so,
whether Defendants have demonstrated that those breaches did not
cause losses to the ESOP. Finally, the Court assesses Plaintiffs’
prohibited transaction claims.
1. Applicability of ERISA
At the outset, Defendants maintain that ERISA does not provide
causes of action for the Clawback Administration Claims because
the ESOP no longer existed at the time of the Siemens transaction.

They highlight that the ESOP was terminated in 2016, Tr. 1-64:20-
22; that participants’ account balances had all been distributed
by the end of 2017, Tr. 6-94:10-19; and that the clawback payments
were paid directly to participants and were not placed in
retirement accounts, Tr. 9-120:10-15.
The Court previously has rejected this argument, see Bowers,
763 F. Supp. 3d at 98-99, and does so again here for the same
reasons. As the Court previously explained, the ESOP, despite being
formally terminated, “retained a future interest in clawback
payments contingent on a subsequent sale of” Russelectric. Id. at
99. “This retained interest qualifies as a plan asset under ERISA,”
meaning that “ERISA governs Defendants’ actions related to the

clawback payments.” Id.; see id. at 98 (“ERISA governs post-
termination activities when a terminated plan retains assets.”).
2. Fiduciary Status
Plaintiffs argue that John exercised authority over the
clawback payments and thus was a functional fiduciary with respect
to the Clawback Administration Claims. I agree.
John was intimately involved in the process of awarding
bonuses in connection with the sale of the company to Siemens. For
example, on March 5, 2018, John suggested that Long meet with
Schultz (the executive compensation consultant) to discuss paying
executive compensation from sale proceeds. Ex. 712; Tr. 1-112:8-
14. John personally lobbied for bonuses for his family, Long, and

company executives. Tr. 5-31:22-32:4. And he believed that no one
should receive a larger bonus than himself. Tr. 5-32:5-21. Further,
John emailed his sisters that larger bonuses would make the
clawback payments smaller. Ex. 799. He wrote that if more money
was allocated to bonuses, the family would “save” money “from the
ESOP clawback.” Ex. 799. John thus knew that the bonuses were
interrelated with the clawback payments and took affirmative steps
to ensure that the bonuses were paid. These actions rendered him
a functional fiduciary.
The Court rejects Defendants’ argument that John’s actions
were “broader business decisions that simply affected the [ESOP]
and its participants.” Mass. Laborers’ Health & Welfare Fund, 66

F.4th at 322. On the contrary, John understood that the bonus
amounts were fundamentally intertwined with the clawback payments.
By exercising authority over the bonuses, he likewise exercised
control over the clawback payments, which were plan assets.
Although “setting (and receiving) executive compensation . . . is
a classically corporate act,” Bendaoud v. Hodgson, 578 F. Supp. 2d
257, 276 (D. Mass. 2008), it can also be a fiduciary act where, as
here, it “directly involve[s] the ‘management or disposition of
[the plan’s] assets,’” id. (second alteration in original)
(quoting 29 U.S.C. § 1002(21)(A)(i)); see Bowers, 763 F. Supp. 3d
at 99.
3. Breach of Fiduciary Duties

Having determined that ERISA applied to the clawback
administration and that John was a functional fiduciary, the Court
next turns to the question of whether John breached fiduciary
duties.
Plaintiffs first contend that John breached the duty to act
“in accordance with [plan] documents and instruments.” 29 U.S.C.
§ 1104(a)(1)(D); see Parmenter, 93 F.4th at 19 (noting that this
duty is part of the duty of prudence). They posit that awarding
bonuses was per se incompatible with the text of the clawback
agreement.
The Court disagrees. The clawback agreement provided that

plan participants would
receive a cash payment equal to the product of (A) the
number of the Company’s common stock allocated to such
participant’s account in the ESOP as of the ESOP
Termination Date multiplied by (B) the difference
between (i) the per share price of the Company’s common
stock as of the ESOP Termination Date as determined by
a valuation report to be prepared by Prairie Capital;
and (ii) the net per share purchase price received by
the shareholders of the Company upon the Consummation of
the Change of Control Transaction.
Ex. 69 (emphases added). The clawback provision facially
distinguishes between the “per share price” of Russelectric stock
as of the ESOP termination date -- i.e., $134 per share -- and the
“net per share purchase price received by the shareholders” after
the Siemens transaction. Id. The latter language contemplates that
the per share price be “net” of certain expenses before being used
to calculate the clawback payments. Id. The Board still was bound
by corporate and fiduciary duties to deduct only reasonable
expenses, but it had no obligation “to maximize the award to the
beneficiar[ies].” Cooke, 70 F.3d at 205. Russelectric’s corporate
counsel testified persuasively that it is customary to deduct
transaction expenses and bonuses before shareholders receive the
proceeds of a corporate acquisition. Tr. 2-127:10-14. Because the
clawback provision allows for the deduction of reasonable bonuses,
Plaintiffs may not “recover benefits due to [them] under the terms
of [the] plan” under 29 U.S.C. § 1132(a)(1)(B), and judgment thus
will enter for John on Count IX.

Although he was entitled to pay reasonable bonuses, John
remained bound by ERISA’s duties of prudence and loyalty. He was
required to “act ‘with . . . care, skill, prudence, and
diligence,’” Brotherston, 907 F.3d at 30 (quoting 29 U.S.C.
§ 1104(a)(1)(B)), and was not entitled to act with the “operative
motive” of “further[ing] [his] own interests,” id. at 40 (quoting
Ellis, 883 F.3d at 6).
Plaintiffs have met their burden of demonstrating that John
failed to satisfy these duties. John plainly acted to further his
and his family’s interests when awarding bonuses in order to “save”
money “from the ESOP clawback.” Ex. 799. His motives were in
fundamental conflict with the interests of plan participants in

receiving higher clawback payments. And he failed to act with the
diligence of a prudent fiduciary, likely because he did not believe
he was a fiduciary at all. Tr. 4-109:11-12. Although John hired
Schultz to opine on the reasonableness of the proposed bonus
amounts, Ex. 712; Tr. 1-112:8-14; Tr. 2-14:21-23, he did not
adequately monitor Schultz’s work, which -- as explained in more
detail below, see infra Section II.C.4 -- was deficient in various
respects. Indeed, Schultz only spent about ten hours analyzing the
proposed bonuses, Tr. 5-83:9-20, and he was unaware of the
existence of a clawback, Tr. 5-87:3-6. Schultz had never advised
a company with an ESOP, Tr. 5-98:23-99:9, and acknowledged at trial
that “[y]ou can’t make mistakes on an ERISA plan,” Tr. 5-99:8-9.

By relying on Schultz, who essentially rubber-stamped bonus
amounts that John and others proposed with little research, John
breached the duties of prudence and loyalty. Tr. 3-49:16-18, 52:14-
22.
4. Loss Causation
As described above, Plaintiffs have “shown a breach of
fiduciary duty.” Brotherston, 907 F.3d at 39. They likewise have
demonstrated a “loss to the plan” because the bonuses resulted in
decreased clawback payments to plan participants. Id. The burden
therefore “shifts to [John] to prove that such loss was not caused
by [his] breach.” Id. To do so, John must show that the bonuses
were “objectively prudent,” i.e., that they “most likely would

have” been awarded by a prudent fiduciary. Id. John has made this
showing with respect to the executive bonuses but not as to the
bonuses paid to himself, Long, and the Advisory Board members.
The Court first analyzes the approximately $31 million in
bonuses awarded to six individuals in management. Ex. 40. Before
the Siemens transaction, each of these individuals received a
salary and were enrolled in a long-term incentive plan (“LTIP”)
that would have provided increasing monetary value the longer the
individuals stayed at Russelectric. Tr. 2-6:18-7:2. The bonuses
thus compensated the executives for their lost salary and the
forgone opportunity to benefit from the LTIP. Tr. 2-7:14-21. John
testified, however, that the bonuses were higher than the

executives would have received under the LTIP. Tr. 5-31:15-21.
This premium served as a reward for the executives’ contributions
to the company. Tr. 5-31:15-21.
The largest executive bonus was paid to Alexandrescu. Ex. 40.
As described throughout this opinion, Alexandrescu served as CEO
during the company’s financial rebound and personally secured the
acquisition offer from Siemens. Tr. 2-20:1-6, 5-73:1-3. He, more
than anyone else at Russelectric, was responsible for saving the
company; indeed, John described Alexandrescu’s turnaround of
Russelectric as akin to a “magic trick.” Tr. 5-71:8. Alexandrescu
introduced various corporate reforms, ranging from new product
development to lean manufacturing. Tr. 2-22:19-23:1, 23:9-15; Tr.

5-76:3-6. Alexandrescu also had a relatively lower salary and
higher expected LTIP payments in order to incentivize him to remain
at Russelectric long-term. Tr. 2-20:16-23; Tr. 5-45:24-46:12. It
thus was reasonable to pay Alexandrescu a premium bonus to replace
his expected earnings and reward him for exemplary work. Tr. 2-
20:13-15. Schultz advised that Alexandrescu’s bonus was reasonable
and customary. Tr. 5-65:20-23; Ex. 746. The Court agrees.
The next-largest executive bonus was paid to Tejada, who
served as Russelectric’s CFO during Russelectric’s financial
turnaround. Ex. 40; Tr. 2-54:24-55:1; Tr. 5-58:4-9; Tr. 8-18:9-
16. Tejada helped change Russelectric’s financial reporting
structure, Tr. 2-22:4-18, and was appropriately rewarded.

The other four executive bonuses were paid to Randy Adleman
(the Vice President of Sales), Mario Frattaroli (the Director of
Operations), Ed Malley (the head of engineering), and John Doran
(the head of quality control). Ex. 40; Tr. 5-58:10-60:8. Each of
these individuals was rewarded for his role in the company
turnaround, including implementing Alexandrescu’s vision of
developing new products, redesigning Russelectric’s factories, and
reorganizing the sales force. Tr. 2-22:19-23:15; Tr. 8-12:20-13:8.
Plaintiffs do not dispute that these executives made important
contributions to the company, and the Court determines that a
prudent fiduciary would have awarded them bonuses in line with
what they received.

Alexandrescu and Tejada each received an additional fee to
compensate them for their M&A work leading up to the Siemens
transaction. Ex. 40. This work was performed on top of their
regular responsibilities, and it allowed Russelectric to undergo
the transaction without paying the usual expense of an outside M&A
firm. Tr. 2-23:16-23; Tr. 5-62:17-63:5. The fees were based on
Schultz’s recommendation of what typical M&A fees would be:
approximately 2% of the sales price. Tr. 2-23:24-24:7; Tr. 5-
63:11-15, 108:18-109:12; Ex. 746. The Court concludes that these
additional fees were reasonable.
Although the executive bonuses and M&A fees were reasonable,

the bonuses paid to John, Long, and the Advisory Board members
were not. None of these individuals were entitled to LTIP payments,
Tr. 2-7:22-8:10, meaning that the bonuses were solely designed to
replace salary and to reward contributions to the company.
The Court begins its analysis with John, who awarded himself
a whopping $14 million for his bonus. Ex. 40. John’s annual salary
was approximately $160,000, and he was Chairman of the Board. Tr.
3-7:12-22; Tr. 5-53:2-11. In his favor, John worked hard for
Russelectric from 2015 to 2019, Tr. 5-54:10-11, and built out the
company’s management team in order to kickstart the financial
rebound, Tr. 3-8:11-16. But although John’s contributions to the
company are laudable, he has not met his burden of demonstrating

that his bonus was reasonable. In advising on John’s bonus, Schultz
believed that John was the President and CEO of Russelectric in
addition to being the Chairman of the Board, and no one corrected
this misunderstanding. Tr. 5-83:24-84:9, 85:16-25. Although
Defendants’ executive compensation expert, Bruce Benesh,11
testified that John’s bonus was reasonable, he acknowledged that

11 Benesh has a business degree, with an emphasis on taxation, and
several decades of experience advising companies on executive
compensation. Tr. 10-7:2-11:25.
Schultz should have known that John was not the CEO and that
knowledge of an individual’s role at a company is important in
advising on their bonus. Tr. 10-51:17-53:6. Given this deficiency

and John’s self-interest in securing the largest bonus, Tr. 5-
32:5-21, the Court finds that such a huge bonus amount would not
have been calculated by a prudent and loyal fiduciary.
Defendants likewise failed to show that Long’s approximately
$3 million bonus was appropriate. Ex. 40. Long’s bonus replaced a
low six-figure annual salary, Tr. 2-73:4-18, and rewarded him for
his contributions to the company, which included negotiating the
clawback agreement and serving as Alexandrescu’s Board point of
contact during the ESOP redemption negotiations, Tr. 1-29:2-4; Tr.
8-53:13-20. Schultz calculated a significantly lower bonus for
Long, and he testified that a seven-digit bonus for a Board member
was very large given the scale of the company. Tr. 5-89:6-16, 90:7-

15. Similarly, Messina testified that Long’s bonus was far higher
than equivalents he has seen. Tr. 6-122:17-24, 123:11-17. Notably,
after John proposed to Schultz that Long receive an approximate
$2.5 million bonus, Schultz “decided to add half a million dollars
to the amount because it seemed like a rounder number to” him. Tr.
5-91:4-7. The Court therefore ascribes little weight to Schultz’s
report’s conclusion that Long’s bonus was reasonable, see Ex. 772,
and instead concludes that Defendants have failed to demonstrate
that a prudent fiduciary would have awarded this amount.
Finally, the Court turns to the approximately $11 million in
bonuses awarded to Russelectric’s Advisory Board, which consisted
entirely of John’s family members: Suzanne, Lisa, James, Jennifer

Novak (Suzanne’s daughter), and Matthew Russell (John’s son). Ex.
40; Tr. 1-119:3-8; Tr. 3-10:13-14, 11:18-19; Tr. 5-121:16-23. The
Advisory Board members received their bonuses as a collective pool
that they divided amongst themselves. Tr. 2-64:18-22; Tr. 3-52:1-
3. The total Advisory Board bonus was approximately 7.2% of the
gross sale price to Siemens, which Schultz opined was reasonably
close to his recommended bonus range of 5-7% of the gross sale
price. Tr. 3-51:13-19; Ex. 784.
Advisory Board members received approximately $40,000 in
annual salaries, with Novak earning $80,000. Tr. 1-119:10-12; Tr.
5-54:16-23. They served no role in corporate governance; instead,
they attended Board meetings with the long-term goal of becoming

more involved in leading the company. Tr. 1-119:21-22; Tr. 3-85:4-
8; Tr. 5-121:7-9. While Suzanne, Lisa, and Jennifer Novak attended
most Board meetings, Matthew and James typically did not. Tr. 3-
9:10-15, 10:22-23, 11:1-5, 11:14-17, 11:24-25. None of the
Advisory Board members had much knowledge about Russelectric’s
industry. Tr. 2-65:12-24.
Although Schultz advised that the collective bonus to the
Advisory Board was appropriate, he was unaware of the limited
nature of the family members’ roles. He assumed that the Advisory
Board served an important role in corporate governance and that
its members were equivalent to C-suite executives. Tr. 5-86:2-10,
88:3-7. He did not consult with anyone at Russelectric regarding

those assumptions and was not informed by company leadership that
he was mistaken. Tr. 5-86:11-14. Nor was he provided any details
on what the Advisory Board members actually did. Tr. 5-86:15-18.
At trial, Schultz testified that when family members are not
involved in corporate governance, they typically receive much
lower bonuses. Tr. 5-97:11-22. Similarly, while Benesh testified
that family advisory board members often get bonuses, he
acknowledged the importance of knowing the actual roles of those
family members at the company. Tr. 10-46:6-12, 51:17-53:6. Messina
testified that he was shocked by the minimal diligence that was
used in backing up the bonus amounts. Tr. 7-99:22-100:3. The Court
agrees. Given the limited role of the Advisory Board and the

deficiencies in Schultz’s review of their bonuses, the Court
concludes that Defendants have failed to show that a prudent
fiduciary would have awarded the bonuses.
Defendants thus have failed to meet their burden of showing
that the bonuses awarded to John, Long, and the Advisory Board
were objectively prudent. See Brotherston, 907 F.3d at 39. Judgment
therefore will enter for Plaintiffs on Count VII with respect to
these bonuses (but not the bonuses awarded to the executives).
5. Prohibited Transactions
Count VIII presents an alternate theory of recovery under
ERISA’s prohibited transactions provisions. Plaintiffs claim that

John violated 29 U.S.C. § 1106(a)(1)(D) by causing the ESOP to
engage in prohibited transactions with parties in interest and
contravened 29 U.S.C. § 1106(b)(1) and (3) by conducting a self-
dealing transaction as a fiduciary.
The Court rejects Plaintiffs’ argument as to § 1106(a)(1)(D).
That provision prohibits a fiduciary from knowingly causing an
ERISA “plan to engage in a transaction” that “constitutes a direct
or indirect . . . transfer to, or use by or for the benefit of a
party in interest, of any assets of the plan.” 29 U.S.C.
§ 1106(a)(1)(D). Here, John’s actions did not cause the ESOP to
itself “engage in a transaction,” id.; rather, he conducted a
transaction (i.e., the payment of bonuses) that impacted plan

assets (i.e., the clawback payments).
As to ERISA’s self-dealing provisions, the Court disagrees
with Plaintiffs as to § 1106(b)(1) but agrees as to § 1106(b)(3).
The former provision prohibits a fiduciary from “deal[ing] with
the assets of the plan in his own interest or for his own account.”
29 U.S.C. § 1106(b)(1). John did not directly “deal with” the
clawback payments; instead, he dealt with bonus payments that
directly affected the clawback provision. Id. Section 1106(b)(3),
though, provides that a fiduciary may not “receive any
consideration for his own personal account . . . in connection
with a transaction involving the assets of the plan.” 29 U.S.C.
§ 1106(b)(3). John’s administration of the bonus payments was “in

connection with a transaction involving” the clawback payments
because the bonuses were fundamentally intertwined with the amount
of the clawback (as John himself knew, see Ex. 799).
Because John entered into a self-dealing transaction under
§ 1106(b)(3) but did not cause the ESOP to enter a prohibited
transaction with parties in interest under § 1106(a)(1)(D),
judgment will enter for Plaintiffs on Count VIII to the extent it
concerns the bonus to John but not to the extent it concerns other
bonuses.
D. Equitable Claims
Finally, Plaintiffs assert several equitable claims against
John under 29 U.S.C. § 1132(a)(3). In Counts V and VI, Plaintiffs

seek to recover traceable proceeds of John’s knowing participation
in a prohibited transaction and in breaches of fiduciary duties
with respect to the clawback negotiation and redemption
transaction. In Count X, Plaintiffs seek to recover traceable
proceeds from John’s knowing receipt of an unlawful bonus as part
of the Siemens sale.
As relevant here, § 1132(a)(3) authorizes courts to issue
“appropriate equitable relief . . . to redress [ERISA] violations.”
29 U.S.C. § 1132(a)(3). That provision “imposes certain duties”
such that “liability under th[e] provision does not depend on
whether ERISA’s substantive provisions impose a specific duty on
the party being sued.” Harris Tr. & Sav. Bank, 530 U.S. at 245. In

particular, plan participants may recover proceeds received by “a
transferee of ill-gotten trust assets” in an unlawful transaction
where the transferee has “actual or constructive knowledge of the
circumstances that rendered the transaction unlawful.” Id. at 251.
Because the Court has concluded that no breach of fiduciary
duties occurred during the clawback negotiation or redemption
transaction and that adequate consideration was paid, see supra
Sections II.A.2-3, II.B.1-2, judgment will enter for John on Counts
V and VI. See 29 U.S.C. § 1132(a)(3) (authorizing “appropriate
equitable relief” to “redress . . . violations” of ERISA or to
enforce the statute’s provisions (emphasis added)); Harris Tr. &
Sav. Bank, 530 U.S. at 246 (noting that § 1132(a)(3) “does

not . . . authorize ‘appropriate equitable relief’ at large, but
only ‘appropriate equitable relief’ for the purpose of
‘redress[ing any] violations” (alterations in original) (quoting
Peacock v. Thomas, 516 U.S. 349, 353 (1996))).
Because the Court has determined that an ERISA violation
occurred with respect to the bonus paid to John, and because John
knew of (and was intimately involved in) the setting of that bonus,
see supra Sections II.C.3-5, judgment will enter for Plaintiffs
against John on Count X. See Tiara Yachts, Inc. v. Blue Cross Blue
Shield of Mich., 138 F.4th 457, 472 (6th Cir. 2025) (“ERISA claims
for breach of fiduciary duty and self-dealing are ‘equitable in
nature.’” (quoting Patterson v. United HealthCare Ins. Co., 76
F.4th 487, 496 (6th Cir. 2023))).12
III. Claims Asserted Against Suzanne and Lisa

The Court now turns to the four claims against Suzanne and
Lisa. In Count IX, Plaintiffs seek “to recover benefits due to
[them] under the terms of [the] [P]lan” under 29 U.S.C.
§ 1132(a)(1)(B), arguing that the clawback provision did not allow
the deduction of bonuses from the gross sale price to Siemens.
Because, as the Court has explained, see supra Section II.C.3, the
plain text of the clawback provision does permit the deduction of
reasonable bonuses to the executives, judgment will enter for
Suzanne and Lisa on Count IX.
The other three claims against Suzanne and Lisa are equitable

claims asserted under 29 U.S.C. § 1132(a)(3). See supra Section
II.D (discussing this provision). In Counts V and VI, Plaintiffs
seek to recover traceable proceeds of Suzanne’s and Lisa’s knowing
participation in a prohibited transaction and in breaches of

12 The Court leaves for damages briefing whether it should award
equitable relief (such as disgorgement) in addition to the relief
under Counts VII-VIII, which provide for damages for losses to
plan participants. See Mauser v. Raytheon Co. Pension Plan for
Salaried Emps., 239 F.3d 51, 58 (1st Cir. 2001) (noting that
equitable relief under ERISA is ordinarily available only to the
extent it is nonduplicative of other remedies).
fiduciary duties with respect to the clawback negotiation and
redemption transaction. In Count X, Plaintiffs seek to recover
traceable proceeds from the sisters’ knowing receipt of unlawful

bonuses as part of the Siemens sale.
Because the Court has concluded that no breach of fiduciary
duties occurred during the clawback negotiation or redemption
transaction and that adequate consideration was paid, see supra
Sections III.A.2-3, III.B.1-2, judgment will enter for Suzanne and
Lisa on Counts V and VI. See 29 U.S.C. § 1132(a)(3); Harris Tr. &
Sav. Bank, 530 U.S. at 246.
As to Count X, the Court has determined that substantive ERISA
violations occurred under the Clawback Administration Claims with
respect to the bonuses paid to John, Long, and the Advisory Board
members (but not the executives). The Court further concludes, as
it now will explain, that Suzanne and Lisa “had actual or

constructive knowledge of the circumstances that rendered th[ose]
[bonuses] unlawful.” Harris Tr. & Sav. Bank, 530 U.S. at 251. They
therefore can be held liable as “nonfiduciary parties in interest.”
Brotherston, 907 F.3d at 36.
Suzanne and Lisa were both members of the Advisory Board
during the relevant time period and attended most Board meetings.
Tr. 5-116:14-18; Tr. 6-10:16-21. They were kept informed by the
Board about developments at the company, Tr. 5-116:19-117:9; Tr.
6-11:6-23, and always read emails that they received from their
siblings (including John), Tr. 5-119:5-7; Tr. 6-14:8-10.
Although Suzanne and Lisa had no role in setting the bonuses

for Long or Russelectric’s executives and did not attend meetings
with Schultz, Tr. 5-127:8-21; Tr. 6-22:3-17, the evidence is clear
that the sisters knew of the bonuses and their effect on the
clawback payments to ESOP participants. Both sisters received, and
responded to, John’s email in which he wrote that higher bonuses
would allow the family to “save” money “from the ESOP clawback.”
Ex. 799. Suzanne responded:
PS I have no problem with everyone being handsomely
compensated, especially you John! We couldn’t have done
it without them! We have loyal employees who have stuck
with us through thick and thin. They deserve a cut too
via the ESOP claw back. They have all done a fantastic
job. There is plenty to go around. We will all reap the
benefits.

Id. While Suzanne expressed her view that the plan participants
“deserve[d] a cut,” the Court concludes from the email exchange
that she understood that that “cut” would be lower if the bonuses
were higher. Id. Similarly, Lisa acknowledged at trial that she
was aware that the bonus payments would reduce the clawback
amounts. Tr. 6-26:20-25.
The Court thus determines that Suzanne and Lisa knowingly
benefited from an ERISA violation by receiving bonuses. Judgment
therefore will enter for Plaintiffs against Suzanne and Lisa on
Count X.
ORDER
For the foregoing reasons, the Court resolves Plaintiffs’
claims against John, Suzanne, and Lisa as follows:
1. With respect to the Clawback Negotiation Claims (in

Counts III-IV), the Court finds in John’s favor.
2. With respect to the Redemption Transaction Claims (in
Counts I-IV), the Court finds in John’s favor.
3. With respect to the Clawback Administration Claims
(Counts VII-IX):
a. On Count VII (claim of breach of fiduciary duties),
the Court finds in Plaintiffs’ favor against John
with respect to the bonuses awarded to John, Long,
and the Advisory Board members. The Court finds in
John’s favor with respect to the bonuses awarded to
the six Russelectric executives.
b. On Count VIII (claim of prohibited transactions),

the Court finds in Plaintiffs’ favor against John
with respect to the bonus awarded to John. The Court
finds in John’s favor with respect to the bonuses
awarded to Long, the Advisory Board members, and
the six Russelectric executives.
c. On Count IX (claim of failure to pay plan benefits
owed), the Court finds in John’s favor.
4. With respect to the equitable claims (Counts V, VI, and
X):
a. On Counts V and VI, the Court finds in Defendants’

favor.
b. On Count X, the Court finds in Plaintiffs’ favor
against all Defendants.
Supplemental briefing is ordered regarding the exact
calculation of damages in this complex case. This briefing must
also discuss the potential reduction (if any) of damages pursuant
to the Court’s previous order involving the settlements of Long,
Wyatt, and Argent, imposing a proportionate share approach to
damages apportionment. See Bowers v. Russell, No. 22-cv-10457,
2025 WL 2740682, at *1-2 (D. Mass. Sep. 5, 2025). In addition, the
parties shall brief what equitable remedies the Court should impose
under Count X.

Within fourteen days of entry of this order, after conferring,
the parties shall file supplemental briefs regarding the
calculation of damages. Within fourteen days of those filings, the
parties may file opposition briefs. No reply briefs may be filed.

SO ORDERED.
/s/ PATTI B. SARIS________________
Hon. Patti B. Saris
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11343636. Public record. Not legal advice.