IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

Civil Action No.: 1:20-cv-02350 

HON. JUDGE RONALD GUZMAN 

JOINT STATUS REPORT 

Plaintiff James Smith, Defendants David Caito; Robert Hardie; Michael McCormick and 

the Board of Directors of Triad Manufacturing, Inc.; (“Triad Defendants”) and Defendant 

GreatBanc Trust Company (collectively “Defendants”) jointly submit this Status Report pursuant 

to the Court’s October 4, 2021 Order (ECF No. 74). 

I. Nature of the Case 

A. Counsel 

Plaintiff James Smith is represented by lead counsel Mary Bortscheller, Michelle Yau, 

Daniel Sutter, and Laura Older of Cohen Milstein Sellers & Toll PLLC. Triad Defendants are 

represented by Matthew Grabell and Ben Fryer of Ford & Harrison, LLP. Defendant GreatBanc 

Trust Company is represented by Mark Nebrig and Kristen Kenley of Moore & Van Allen PLLC 

and Adam Glazer, Norman Finkel, and William Klein of Schoenberg, Finkel, Newman & 

Rosenberg, LLC. On October 7, 2021, counsel met and conferred telephonically pursuant to the 

Court’s October 4, 2021 Order (ECF No. 74). 

James Smith, on behalf of himself and all others 

similarly situated, and on behalf of the Triad 

Manufacturing, Inc. Employee Stock Ownership 

Plan, 

Plaintiff, 

v. 

GreatBanc Trust Company; the Board of Directors 

of Triad Manufacturing, Inc.; David Caito; Robert 

Hardie; and Michael McCormick, 

Defendants. 
B. Claims and Jurisdiction 

1. Plaintiff’s Position: 

Plaintiff asserts claims against Defendants under the Employee Retirement Income 

Security Act (“ERISA”) on behalf of all other similarly situated participants in the Triad 

Manufacturing, Inc. Employee Stock Ownership Plan (the “Plan”). 29 U.S.C. § 1001 et seq. 

Plaintiff alleges that Defendants engaged in prohibited transactions in violation of 29 U.S.C. § 

1106 and imprudent and disloyal conduct in violation of 29 U.S.C. § 1104 when dealing with the 

Plan. Plaintiff alleges that the Triad Plan is a retirement plan where the employer’s retirement 

contributions, made on behalf of employees, are invested entirely in the employer's privately held 

stock, 29 U.S.C. § 1107(d)(6); see also 29 C.F.R. § 2550.407d–6. Plaintiff further alleges that 

these contributions constitute an important part of the employees’ retirement savings. 

Plaintiff’s factual allegations center on Defendants Caito, Hardie and McCormick’s sale of 

their stock in Triad Manufacturing, Inc. to the Plan at an inflated value of $58.05 per share (or 

$106.2 million in the aggregate). Plaintiff alleges that the Plan participants did not negotiate the 

purchase price of $58.05 per share or any other terms of the Transaction, and agreed to by the Plan 

Trustee, GreatBanc and the Selling Shareholders. For the alleged conduct, Plaintiff seeks remedies 

pursuant to 29 U.S.C. § 1132(a)(2) and 29 U.S.C. § 1109(a), including the restoration of the losses 

Defendants caused to the Plan’s retirement assets. Plaintiff also seeks appropriate equitable relief 

pursuant to 29 U.S.C. § 1132(a)(3) including, but not limited to, declaratory judgement, injunction, 

surcharge, and disgorgement of profits. Plaintiff avers that the class may be certified pursuant to 

either Rule 23(b)(1), Rule 23(b)(2), and Rule 23(b)(3). 

The Court has subject matter jurisdiction over Plaintiff’s claims pursuant to 29 U.S.C. § 

1132(e)(1) and 28 U.S.C. § 1331, and Plaintiff has standing to assert his claims. The Court also 

has personal jurisdiction over the Defendants because they transact business in, and have 
significant contacts with, this District. Venue is proper pursuant to 29 U.S.C. § 1132(e)(2) because, 

inter alia, Defendant GreatBanc resides in this district, alleged breaches of fiduciary duty took place 

in this district, and Triad Defendants employ individuals in this District. 

2. Triad Defendants’ Position: 

The Triad Defendants believe that Plaintiff’s claims against them are completely without 

merit. To the extent each of the respective Triad Defendants had a fiduciary duty, and to the extent 

each of the respective Triad Defendants were acting in a fiduciary capacity, each of the Triad 

Defendants acted in accord with said duty both before and after the Transaction took place. 

Moreover, the Triad Defendants carefully vetted, and thereafter retained highly regarded experts 

to perform the valuation of the share price and ensure that the Transaction was conducted in the 

best interest of the participants. Those experts work was monitored in accordance with any 

fiduciary duty each of the respective Triad Defendants may have had. Moreover, none of the Triad 

Defendants engaged in a prohibited transaction because the Transaction was conducted in 

accordance with the prohibited transactions exemptions under ERISA § 408 (29 U.S.C. §1108) 

and in accord with all duties the Triad Defendants may have respectively had. Finally, the Triad 

Defendants do not believe that class action is appropriate in this case because Plaintiff cannot 

satisfy the requirements Rule 23, and therefore, a class is not certifiable. As a result, the Triad 

Defendants do not believe Plaintiff is entitled to any relief in this matter. 

3. GreatBanc’s Position: 

GreatBanc disputes Plaintiff’s allegations that GreatBanc engaged in prohibited 

transactions in violation of 29 U.S.C. § 1106 and imprudent and disloyal conduct in violation of 

29 U.S.C. § 1104 when dealing with the Plan (or the “ESOP”). It is GreatBanc’s position that, 

contrary to the allegations in the Complaint, GreatBanc fulfilled its role as the independent, 

discretionary trustee of the Plan pursuant to any and all fiduciary duties imposed by virtue of that 
position. GreatBanc carefully considered all terms of the ESOP’s purchase of the Triad 

Manufacturing, Inc. stock (the “Transaction”), including appropriately considering the effect that 

financing the purchase of the stock would have on the Plan. Based on this detailed review, 

GreatBanc negotiated for favorable Transaction terms for the ESOP. GreatBanc also conducted 

an extensive review of detailed, accurate information to gather a reliable view of the financial state 

of the company, such as a valuation report containing a conclusion of a range of fair market value 

of the Triad stock. GreatBanc disputes Plaintiff’s allegations that the valuation report was based 

on unreliable or unrealistic projections. 

Each step of the process was conducted with the utmost diligence, and GreatBanc ultimately 

approved the transaction based on its informed opinion that doing so would be in the best interest 

of the Triad ESOP participants, including Plaintiff. Any allegations that Plaintiff pleads to the 

contrary are denied. 

GreatBanc agrees that the Court has personal jurisdiction over GreatBanc, and that venue is 

proper in this district as it relates to GreatBanc. GreatBanc’s position is further detailed in its 

Answer to Plaintiff’s Complaint and Affirmative Defenses filed on June 29, 2020. 

II. Discovery and Motions 

A. Motions 

Plaintiff filed his complaint on April 15, 2020. (ECF No. 1). On June 1, 2020, the Triad 

Defendants filed a motion to compel arbitration and/or dismiss the case pursuant to Fed. R. Civ. P. 

12(b)(3) and/or 12(b)(6). (ECF No. 29). This Court denied the motion on August 21, 2020 (ECF 

No. 51). The Triad Defendants’ appealed the denial to the Seventh Circuit Court of Appeals, which 

on September 10, 2021, affirmed the District Court’s decision denying the motion to compel 

arbitration and/or dismiss. 

The Parties anticipate filing a motion for a protective order governing the exchange of 
confidential information. 

B. Discovery 

The Parties have exchanged initial disclosures.

The Parties report as follows regarding the contents of Rule 26(f): 

Rule 26(f)(3)(B): The Parties submit that discovery does not need to be conducted in phases 

or limited to/focused on specific issues beyond the issues asserted in the Complaint and Defendants’ 

responsive pleadings. Plaintiff anticipates seeking discovery regarding the allegations asserted in 

the Complaint, Defendants’ responsive pleadings and damages. Defendants anticipate seeking 

discovery on the allegations asserted in Plaintiff’s Complaint and Plaintiff’s representation of the 

putative class. The Parties anticipate that expert discovery will be necessary following the close of 

fact discovery.

Rule 26(f)(3)(C): The Parties have agreed to meet and confer on October 15, 2021 regarding 

electronically stored information (“ESI”), including the form(s) in which it will be produced. 

Rule 26(f)(3)(D): The Parties do not believe any issues exist regarding privilege claims or 

protection of trial-preparation materials. 

Rule 26(f)(3)(E): The Parties agree that Plaintiff’s depositions will be limited to 15 

depositions, and GreatBanc and the Triad Defendants will each be limited to 10 depositions, with 

the Triad Defendants collectively limited to 10 depositions, and with the ability to seek additional 

depositions by agreement or with leave of Court if necessary. The Parties agree that Plaintiff will 

be limited to 35 written interrogatories, and GreatBanc and the Triad Defendants will each be 

limited to 25 interrogatories, with the Triad Defendants collectively limited to 25 interrogatories, 

and with the ability to seek additional interrogatories by agreement or with leave of Court if 

necessary.

Rule 26(f)(3)(F): The Parties request the issuance of a scheduling order under Rule 16(b). 
II. Settlement 

The Parties discussed the prospects of prompt settlement and believe that settlement at 

this stage of litigation is premature prior to the exchange of discovery regarding the sale of 

Triad stock to the Plan. 

III. Proposed Schedule 

The Parties’ scheduling proposal is summarized in the chart below. 

Event Proposal

Pleading Amendment February 28, 2022

Document Production Completion April 29, 2022

Close of Fact Discovery August 1, 2022

Motion for Class Certification August 17, 2022

Opposition to Class Certification September 21, 2022

Class Certification Reply October 12, 2022

Opening Expert Reports November 30, 2022 

Rebuttal Reports January 15, 2023

Close of Expert Discovery February 15, 2023

Dispositive Motions March 3, 2023

Opposition to Dispositive Motions April 3, 2023

Reply to Dispositive Motions April 24, 2023

[Remainder of page intentionally left blank] 
Dated: October 11, 2021 

Signed: Signed: 

/s/ Mary J. Bortscheller 

COHEN MILSTEIN SELLERS & 

TOLL PLLC 

Michelle C. Yau (admitted pro hac vice) 

Mary J. Bortscheller, Illinois Bar: 

6304457 Daniel R. Sutter, (admitted pro 

hac vice) 1100 New York Ave. NW ●

Fifth Floor Washington, DC 20005 

(202) 408-4600 

myau@cohenmilstein.com 

mbortscheller@cohenmilstein.co

m 

dsutter@cohenmilstein.com 

Carol V. Gilden, Illinois Bar: 6185530 

190 South LaSalle Street, Suite 1705 

Chicago, IL 60603 

Tel: (312) 357-0370 / Fax: (312) 357-0369 

cgilden@cohenmilstein.com 

Attorneys for Plaintiff 

/s/ Matthew D. Grabell 

Matthew D. Grabell (Bar No. 6312929) 

FORD & HARRISON, LLP 

271-17th Street, NW, Suite 1900 

Atlanta, GA 30363 

Mgrabell@fordharrison.com 

(404) 888-3820 

Benjamin P. Fryer (pro hac vice forthcoming) 

North Carolina Bar No. 39254 

FORD & HARRISON, LLP 

6000 Fairview Road, Suite 1200 

Charlotte, NC 28210 

bfryer@fordharrison.com 

Telephone: (980) 282-1900 

Facsimile: (980) 282-1949 

Attorneys for Board of Directors of Triad 

Manufacturing, Inc., David Caito, Robert 

Hardie, and Michael McCormick
/s/ Kristen J. Kenley 

Mark A. Nebrig (admitted pro hac vice) 

North Carolina Bar No. 28710 

Kristen J. Kenley (admitted pro hac vice) 

North Carolina Bar No. 49310 

MOORE & VAN ALLEN PLLC 

100 North Tryon Street, Suite 4700 

Charlotte, North Carolina 28205 

Telephone: (704) 331-3602 

Facsimile: (704) 339-5974 

marknebrig@mvalaw.com 

kristenkenley@mvalaw.com 

Adam J. Glazer (Bar No. 6199294) 

Norman T. Finkel (Bar No. 6183246) 

William R. Klein (Bar No. 6185715) 

SCHOENBERG, FNKEL, NEWMAN & 

ROSENBERG LLC 

222 South Riverside Plaza, Suite 2100 

Chicago, IL 60606 

Telephone: (312) 648-2300 

adam.glazer@sfnr.com 

norm.finkel@sfnr.com 

bill.klein@sfnr.com 

Attorneys for Defendant 

GreatBanc Trust Company