JetDirect Reaches Preliminary Settlement in Benefit and Retirement Class Action

Boston, MA: A tentative $400,000 settlement has been reached between the former owners of JetDirect and a group of ex-employees who claimed some of their benefit and retirement account money was diverted improperly.

The plaintiffs filed a class-action lawsuit in 2010 alleging the Weymouth-based company used employee benefit money to pay for company operating expenses as it attempted to avoid bankruptcy.

The suit claims that the company began diverting funds from employees' 401K plans, health and life insurance policies, disability insurance and flexible spending plans beginning in December 2008.

Some 830 employees, including 80 who live in Massachusetts, were affected by the company's actions, according to the lawsuit. The suit named JetDirect Aviation and former executives Robert Pinkas and Gregory Campbell as defendants.

U.S. District Court Judge Richard Stearns approved the preliminary settlement in December and scheduled a fairness hearing for May 16, after which the settlement could be finally certified.

JetDirect filed for Chapter 7 bankruptcy to liquidate operations in April 2009.