By James McNair
The Cincinnati Enquirer

DAYTON, Ohio - More than 110 former workers of the defunct Electro-Jet Tool & Manufacturing Co. of Evendale were assured long-delayed pension payouts Thursday. A federal judge ratified a settlement calling for a group of banks, law firms and former officers to pay them $14.4 million.

The deal ended 10 years of litigation that outlasted four judges and required a fifth, Thomas Rose, to recover from emergency heart surgery last June. Rose approved the settlement in a courtroom occupied mostly by lawyers, but also the lead plaintiff, former Electro-Jet machinist Bill McDannold.

"I'm happy and satisfied with everything," the 59-year-old Erlanger resident said after the hearing.

Electro-Jet failed in 1997, and the value of its employee stock ownership plan (ESOP) plummeted. The ESOP had been created nine years earlier when management induced employees to approve the transfer of their profit-sharing plan holdings into the ESOP. It turned the employees into owners, but in a lawsuit filed in 1994, they complained that they had been duped into buying a company whose orders were declining and whose financial condition was aggravated by a $10.2 million loan to buy Electro-Jet.

The employees, represented by lawyer Judith Boyers Gee of Covington, sued management, the bank and the law firms, trustees and appraisers involved in the transaction. The defendants agreed to pay the following amounts:

• U.S. Bank, then known as First National Bank of Cincinnati, $3.34 million.

• The law firm Graydon Head & Ritchey, $3.34 million.

• The law firm Lindhorst & Dreidame, $3.05 million.

• Former Electro-Jet majority owner John Endres, $3 million.

• Gradison McDonald Investments, $1.6 million.

After the deduction of $3.4 million in fees to the plaintiffs' lawyers - including $2.37 million to Gee - about $10.9 million will be paid to the 113 rank-and-file employees. That, combined with the ESOP balance, will roughly equal the profit-sharing plan's value based on an estimate done at the end of 2002.

E-mail jmcnair@enquirer.com