WDME President Claims Directors Mishandled Employee Stock Plan

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The current president of William D. Meeker Enterprises, Inc. (WDME) has filed suit against director William D. Meeker, his wife Frances Renee Hand, and Duane Tolander, who is the trustee of the company’s Employee Stock Ownership Plan (ESOP). The plaintiff alleges that the defendants have breached their fiduciary duties to WDME employees – members of the ESOP – by making decisions that were not in the best interests of the company and instead were for their own benefit. As a result, the suit argues, employees have been robbed of the value of their investments in the ESOP and the defendants have reaped the benefits.

The plaintiff alleges that in 2006, Meeker sold his WDME stock to the company for a total amount of $5,000,000 to be paid to him with “above-market” interest over the next 20 years, meaning the entire stock of the company was then owned by the ESOP. Part of the agreement, the complaint claims, ensured that Meeker would essentially have voting control over the Board of Directors as long as the debt owed to him remained above $200,000.00. In 2016, the plaintiff says, Meeker named his wife as a director of the company and removed several others from their positions on the board.

The plaintiff alleges that, as the company’s president, she “began to question” Meeker and Tolander about certain financial decisions that “did not appear to be in the best interest of the Company,” but was told that the outside counsel she had hired to analyze the company’s finances was “just confused.” The plaintiff says that sometime after she raised concerns about the defendants’ handling of the ESOP, she was advised that her employment contract would not be renewed in April 2018 and that she need not return to work after October 2017.

The suit argues that the defendants have purposely delayed the company’s payments to Meeker in order to keep the remaining balance over $200,000.00 and protect his hold over the board of directors. In the meantime, the complaint says, Meeker has proposed that WDME merge or sell various subsidiaries, benefiting only himself and robbing ESOP participants of their retirement investments in company stock.

On top of this, the suit raises red flags about several other of the defendants’ decisions, such as the employment of Hand’s daughter, apparent inconsistencies in the company’s financial records, and a refusal to respond to employees’ questions regarding the ESOP. The plaintiff says that she has “exhausted all administrative remedies under the ESOP” and now demands relief for proposed class members.