For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Administration June 5, 2007
Settlement Proposed for BellSouth Company Stock Suit
May 18, 2006 (PLANSPONSOR.com) - Bellsouth has
agreed to settle with employees who claim the company
breached its fiduciary duties in relation to company stock
retirement savings investments.
Reported by Rebecca Moore
The Associated Press reports that, under the proposed settlement, BellSouth agreed to pay employer match contributions in cash instead of stock, add investment options to the plans, and pay plaintiffs’ lawyers $3.68 million. A hearing on the proposal is set for June 13.
The proposed settlement also says that if BellSouth is acquired by or merges with another company, the successor company will be required to carry out the terms of the settlement, according to the AP. The company agreed in March to be acquired by AT&T.
The lawsuit, filed in 2003, argues that a conflict of interest exists for an executive whose job it is to look out for the company’s financial well-being to act as a fiduciary of the company’s retirement plan. The suit alleges that plan participants were not informed of the company’s operational problems that later resulted in decreased stock prices (See BellSouth, Scientific-Atlanta Hit with Company Stock Suits). In 2004, BellSouth’s motion to dismiss the lawsuit based on the fact that its actions did not result in a loss for the retirement plans, was denied by a federal judge (See BellSouth Employee Fiduciary Breach Suit To Continue).
« MetLife Study Shows Employee Retention As Top Benefit Motive