Empire Today, an iconic seller and installer of flooring and window treatments, has withdrawn a lawsuit against two of its executives it had accused of working with an insurer to defraud the company by diverting workers compensation insurance payments.

On March 12, 2014, a federal judge signed off on a joint request from Empire and the executives and other defendants to dismiss the litigation in its entirety, with prejudice.

All parties agreed to bear their own expenses related to the litigation.

The dismissal cut the case short, even as the parties had been scheduled to head to mediation.

On Jan. 15, 2014, attorneys for the company and the former executives, Steve Silvers and Judd Feldman, filed a joint status report in the suit that was filed in November in Chicago's federal court.

In the report, Empire Today and the defendants confirmed they intended to take the matter to private mediation on Jan. 23.

Court records did not indicate if mediation occurred, nor what the outcome of that mediation may have been.

The executives had consistently denied the allegations, contending “the workers compensation arrangement was disclosed to and approved by Empire,” despite the company’s assertions to the contrary.

However, the filed report said that if mediation fails, the executives would likely ask the judge to dismiss the case. And one threatened to countersue the company, alleging they retaliated against him for being willing to report “insider trading activities” at Empire.

In the lawsuit filed in the fall of 2013, Northlake-based Empire Today LLC alleged that Silvers, who formerly served as the company’s chief executive officer, and Feldman, the former chief financial officer, conspired with Risk Partners, an insurance brokerage firm based in New Jersey, over an eight year period to deceive and defraud Empire, various subcontractors and insurance companies.

The complaint centers on Empire’s use of “retrospectively-rated” workers compensation insurance policies. Under such arrangements, the company pays the entire premium for subcontractors’ workers compensation insurance policies.

Those premiums are based on an estimate of the total number of hours the subcontractors’ insured employees were expected to work within the policy period.

After actual payroll is calculated, any overpayment made by Empire is then refunded by the insurance companies, back through the subcontractors, to Empire.

However, Empire claims that beginning in 2005, Feldman, of Buffalo Grove, and Silvers, of Deerfield, diverted those refunds through a corporate entity the two created with the assistance of Risk Partners.

Empire --which is well known in the area for advertising that features the “Empire Man” character and a singing jingle of its phone number and name-- also contends that the former executives try to conceal the diversion, using their positions within the company to create false information for others to see.

The alleged scheme was uncovered in early 2013, Empire claims, after one of the insurers filed suit against a subcontractor that eventually prompted it to hire a law firm to investigate the matter.

Silvers was fired when the allegations came to light. Feldman had resigned prior to the investigation.

Altogether, Empire asserted it was owed $25 million in damages, including $18 million under the federal Racketeer Influence and Corrupt Organizations (RICO) Act.

Empire was represented in the action by attorneys Kevin D. Kelly and Katherine H. Harris, of Locke Lord LLP in Chicago.

Silvers and Feldman are represented by attorneys Nancy A. Temple and John M. George, of Katten & Temple LLP in Chicago.

And Risk Partners, which the report indicated was not party to the mediation, is represented by Chicago attorneys Kevin O’Hagan and Daniel J. Nolan of O’Hagan LLC.

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