NAC lawsuit over pension continues
Herman claims he is owed more than $6 million
While North American Communications Inc. suddenly ceased operations Monday, putting nearly 200 employees out of work, a lawsuit involving a dispute over the pension to be paid to the company’s founder is continuing in the U.S. District Court in Johnstown.
Michael Herman claims the company is in breach of his retirement agreement and that he is owed more than $6 million.
He opened the direct mail print production company, now based in Duncansville, 40 years ago and says in court papers that the fledgling business grew to the point where it annually generated more than $60 million in revenue.
In 2013, Herman and another NAC stockholder came under investigation by the Internal Revenue Service for unpaid personal taxes.
According to a lawsuit filed by North American, a deal was struck with Herman and the other 50 percent stockholder that they would transfer their ownership interest in the company, resign their positions on the board of directors and cease any relationship with NAC.
The agreement provided that Herman would receive a “retirement benefit” of $130,000 a month for 10 years, but the agreement placed certain restrictions on him.
His retirement payments would be subordinate to any obligations the company had for bank indebtedness or other bills, the agreement stated.
The agreement also included a non-competition and non-solicitation clause as well as other provisions.
North American contends Herman has been under a subordination agreement with it and Alostar Bank because of NAC’s obligations to the bank.