ERISA Plan Lawsuit Settled for $6.5 Million

Kansas City, MOAn ERISA plan lawsuit has recently been settled for approximately $6.5 million. The lawsuit alleged a company mismanaged its employee savings plan, a violation of ERSIA plan laws. Employees who feel their employers have mismanaged employee stock options plans or savings plans may be eligible to file an ERISA lawsuit against their employer or plan fiduciaries.

In the recently settled lawsuit, plaintiffs alleged YRC Worldwide Inc. improperly managed its retirement plan by investing in YRC stock even though the company's financial situation was declining. The value of YRC stock reportedly decreased, causing losses to plan assets. According to Kansas City Business Journal (11/09/11), YRC agreed to settle the lawsuit for approximately $6.5 million, although the settlement must still be approved by a judge.

The lawsuit reportedly combined four separate lawsuits filed in 2009 and 2010 by current and former YRC Worldwide employees.

Meanwhile, a judge has given the go-ahead to a $32 million settlement in the ERISA lawsuit filed against Sam Zell, GreatBanc Trust Company and EGI-TRB, LLC. The lawsuit was filed in November 2008, by Dan Neil, on behalf of participants in the employee stock option plan (ESOP) alleging the defendants breached their fiduciary duty to ESOP participants by forcing the ESOP to pay more than the fair market value for stock in the Tribune. Neil filed the lawsuit following the ESOP's buyout of the Tribune Company. According to a news release, the plaintiffs further alleged that defendants allowed the ESOP to purchase unregistered stock while Tribune stock was being publicly traded.

Approximately one year after employees of the Tribune became owners through the ESOP buyout, the Tribune Company filed for bankruptcy protection.

The Tribune Company owns the Chicago Tribune, the Los Angeles Times and other media outlets. The media company was initially included in the lawsuit but dropped after it declared bankruptcy. A final hearing regarding the settlement is scheduled on January 30, 2012.

Sam Zell, who orchestrated the deal, has said he is not responsible for the financial collapse of the Tribune Company. At the time the Tribune Company filed for bankruptcy protection, it was reportedly $13 billion in debt.