March 19, 2025
Employees allege that owners of California’s top design-build multifamily plumbing subcontractor abused the AMPAM’s Employee Stock Ownership Plan in an illegal $247 million transaction
Washington, D.C. – A California federal court certified a class of employees and participants of the AMPAM Parks Mechanical, Inc. Employee Stock Ownership Plan (ESOP). AMPAM Parks Mechanical, one of California’s largest multifamily plumbing subcontractors, employs approximately 1,000 employees throughout Los Angeles, San Diego, and Northern California.
“I am really pleased the judge granted class certification in this important lawsuit against AMPAM Parks Mechanical for violating ERISA,” said Michelle C. Yau, chair of Cohen Milstein’s Employee Benefits/ERISA practice. “The Court correctly found—as dozens of prior decisions previously held—in ERISA fiduciary cases, “Plaintiffs’ claims and defenses are identical to the unnamed class members.””
The plaintiffs allege that the founders of AMPAM Parks Mechanical, Buddy Parks, John D. Parks, James Parks, and Jason Parks (“the Parks brothers”), and Neil Brozen, violated the Employee Retirement Income Security Act (ERISA) by allegedly creating the AMPAM ESOP for the sole purpose of selling their interest in AMPAM at an inflated price of $247 million.
To achieve the $247 million purchase price in the ESOP transaction, they hired Neil Brozen, president of Ventura Trust, a trust company doing business in Minnesota. Notably, there are multiple lawsuits pending against Neil Brozen for violations of ERISA, including a lawsuit filed by the Secretary of Labor and other class actions filed by employees of other ESOPs.
The suit further alleges that neither the Parks brothers nor Neil Brozen involved AMPAM employees in negotiating the price the ESOP would pay or the other terms of the transaction. Rather, AMPAM employees found out about the purchase of AMPAM from the Parks brothers only after the ESOP transaction was complete.
Shortly after the sale, AMPAM’s stock held by the ESOP was reported to be valued at $17,821,310, or approximately 7% of what the ESOP had paid for the company. Thereafter, the company’s value plummeted, resulting in a valuation of a mere $2.1 million, less than 1% of what the plan paid. Ultimately, based on public reporting, the ESOP participants sold the stock for less than they paid for it just four years earlier.
The name of the case is Ramirez, et al. v. AMPAM Parks Mechanical, Inc., et al., United States District Court for the Central District of California.
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