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Former workers file suit against state lawmaker

September 28, 2014

A state lawmaker who was one of nine Republican state senators to vote against a right-to-work law two years ago is accused in a lawsuit of failing to pay his employees more than $220,000 in wages and other benefits.

Sen. Brent Waltz is contesting the lawsuit, saying he was an adviser to, but never an officer or owner of Indianapolis Diversified Machining.

Company records indicate Waltz owned a fifth of IDM, served as its chief financial officer and earned an annual salary of more than $60,000, The Indianapolis Star reported. The company's bylaws list Waltz as an owner.

Waltz said those records are inaccurate and that he only had stock options he never invoked.

More than 40 workers filed a lawsuit against IDM after it closed in 2009. The lawsuit was filed in Marion County Court against Waltz, four of the company's other founders and The Baron Group, an investment banking firm owned by Waltz. Earlier this year, they won a partial judgment against the company for $720,000 in unpaid wages, damages and attorney fees.

None of that money has been collected. Other aspects of the lawsuit are pending, including accusations of fraud, conversion and unjust enrichment and whether the workers can pursue the company's assets as well as Waltz's personal assets.

Most employees lost a month of wages as well as unused vacation when the company abruptly closed in March 2009. They also learned that IDM did not pay Social Security taxes that had been withheld from their paychecks.

Former workers say the biggest shock was that IDM paid Waltz and The Baron Group $148,000 after the company closed.

"If they didn't have any money left, that's understandable. But to say there's no money left and then to start giving money away to somebody other than the employees?" said Ray Gainey, a former IDM shipping clerk.

Waltz said IDM wrote the checks to him and his company to cover investment banking services and services related to the company's closure and attempted sale. He said he also loaned money to four company officers for personal expenses.

The company had planned to pay the employees with a $106,000 payment from a customer that never materialized, Waltz said.

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