June 12, 2025
B-K Lighting Strikes Deal to End ESOP Lawsuit
Unlike most civil cases, key settlement details are expected to be publicly disclosed
A two-year legal battle surrounding B-K Lighting’s employee stock ownership plan (ESOP) may be nearing resolution. B-K Lighting, a California-based manufacturer and leading brand in architectural landscape and outdoor accent lighting, filed a Notice of Settlement on June 10 in the U.S. District Court for the Eastern District of California. While that marks a significant development, the case remains open — and far from fully resolved.
The original lawsuit, filed in May 2023 by an ex-employee who worked in an HR role, alleged that B-K Lighting executives and company insiders enriched themselves through an inflated ESOP transaction and a series of questionable deals. These included a $25 million stock sale to the ESOP, a $2 million consulting agreement for the founder, and use of a company-funded private jet for personal travel. There were even allegations of sham lease payments for a non-existent forklift. All allegations were denied by B-K Lighting.
With the settlement notice now on record, the case enters what is typically its final procedural phase. But because it involves a proposed class action and Employee Retirement Income Security Act (ERISA) claims, the court's role intensifies — not winds down.
What Happens Next
ERISA settlements that resolve plan-wide claims must go through a public approval process. A motion for preliminary approval is expected soon, which will include the proposed financial terms, how funds will be allocated to ESOP participants, any attorney fee requests, and potential governance reforms.
Importantly, a final fairness hearing may be required. At that hearing, the court would assess whether the settlement is “fair, reasonable, and adequate,” and plan participants will have an opportunity to object or comment. These hearings are standard in class action litigation but take on added weight when retirement funds are involved.
Because ERISA protects retirement savings, courts apply heightened scrutiny. Disclosures are typically more detailed than in other class actions. Federal courts often examine whether the deal includes not just financial restitution but also structural reforms — such as fiduciary monitoring or trustee replacement.
In some cases, the U.S. Department of Labor (DOL) may intervene or file a statement of interest. While that hasn’t happened yet in this matter, it remains a possibility given the claims and public interest implications.
A Slow Path to Closure
Though the Notice of Settlement was filed in recent days, the road to final resolution may span several more months. If the court grants preliminary approval, formal notices will be sent to class members, followed by a 30–60 day objection period. Only then would a final fairness hearing be scheduled.
The Inside Lighting I-Team will continue to monitor developments.
