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Compliance May 2, 2016
Kodak Settles Stock Drop Suit for Nearly $10M
The lawsuit claims that when Kodak filed for bankruptcy protection in January 2012, it failed to take action to protect retirement plan participants from financial loss.
Reported by Rebecca Moore
Subject to a court’s final approval, Kodak and a group of employees suing the company have reached a settlement agreement that includes a cash payment of $9.7 million.
Participants in the Eastman Kodak Employees’ Savings and Investment Plan (SIP) and/or the Kodak Employee Stock Ownership Plan (ESOP), sued the company after it filed for bankruptcy in 2012. The participants alleged that Kodak fiduciaries violated the Employee Retirement Income Security Act (ERISA) by permitting the plans to offer Kodak stock as an investment option after objective information revealed that Kodak was in extreme financial distress and that Kodak stock was an extremely risky investment that was imprudent for retirement asset investments.
The lawsuit covers a class of participants and beneficiaries in the plans that were invested in the Kodak stock fund. According to the settlement agreement, there are more than 21,000 members of the class.
The settlement agreement for In Re Eastman Kodak ERISA Litigation is here.