Lawsuit Filed to Recover $10M From Trustee
September 1, 2021, Southern District of Iowa – Plaintiff John Michael Maier, Professional Fiduciary Services, LLC, as trustee for the Dahl’s Employee Stock Ownership Plan and Trust recently brought a lawsuit against Defendant Barry A. Chatz, the liquidating trustee of the Debtor Foods, Inc. Liquidating Trust for “breach of fiduciary duty” and “breach of liquidating trust agreement”.
Plaintiff’s claims specifically are connected with the transactions contemplated in the liquidating trust agreement. Plaintiff asserts claims relating to Defendant liquidating trustee’s performance under the liquidating trust agreement and alleges that the liquidating trustee’s actions amounted to “gross negligence” and “willful misconduct”. According to the Plaintiff, the liquidating trustee “breached his duties” by failing to file a liquidating trustee fiduciary action until after the expiration of the run-off period, thereby denying the Liquidating Trust the benefits of the Directors, Officers, and Organization Liability Insurance policy ( D&O policy) concerning the Liquidating Trust fiduciary action. D&O Policy provided liability coverage for “wrongful acts” by individuals acting in a fiduciary capacity. Through its complaint, Plaintiff requests the Court to enter an order compelling the payment of damages in an amount not less than $10,000,000.
The case is In re Foods, Inc. d/b/a Dahl’s Foods in the United States Bankruptcy Court for Southern District of Iowa under case number 21-30022-ALS.