KPC Healthcare Holdings, Inc. Employee Stock Ownership Plan
(2021 Transaction)
Summary of Lawsuit
This lawsuit alleges that the KPC Healthcare, Inc. ESOP Committee (the “ESOP Committee”) violated its duties under ERISA as the Plan Administrator by failing to provide timely and accurate disclosures and information to the ESOP participants about the December 29, 2021 transaction (the “2021 Transaction”) in which the 100% of KPC ESOP’s stock was sold to Dr. Chaudhuri through his company Victor Valley Hospital Acquisition.
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Prior to the 2021 Transaction, the KPC Healthcare, Inc. Employee Stock Ownership Plan (the “Plan” or “ESOP”) owned 100% of the KPC Healthcare, Inc. The Complaint alleges that the ESOP Committee first announced the 2021 Transaction to ESOP participants in August 2022. However, the ESOP Committee has yet to disclose key details about the 2021 Transaction including the sales price or that the stock was sold to an entity controlled by Dr. Kali Pradip Chaudhuri, the Chairman of the Board and a fiduciary of the ESOP.
At the same time as the 2021 Transaction, KPC amended the ESOP without informing the participants. The Complaint alleges that the amendments changed the terms of the Plan, including the timing and manner of distribution and conversion the ESOP into a Profit Sharing Plan. Despite these amendments, the Summary Plan Description has not been updated since September 1, 2017. The Complaint alleges that the Committee, which is the Plan Administrator, has failed to timely file the most recent annual report with the US Department of Labor, which was due in March 2023. Finally, the Complaint alleges that Plaintiff attempted to obtain key documents related to the sale and the value of the plaintiff's benefits, such as the valuation report connected to the 2021 Transaction, but the Plan Administrator refused to provide copies of such documents.
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The Complaint was filed on August 1, 2023.
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Whom to Contact for More Information
If you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
R. Joseph Barton, Esq. jbarton@thebartonfirm.com
Ming Siegel, Paralegal ming@thebartonfirm.com
The Barton Firm LLP
1633 Connecticut Ave. NW Suite 200
Washington, DC 20009
(202) 734-7046