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Compliance August 30, 2010
Beazer Stock Drop Pact Gets Court OK
August 30, 2010 (PLANSPONSOR.com) – A federal judge in Atlanta has given preliminary approval to a $5.5 million-settlement of a stock drop lawsuit against Beazer Homes USA.
Reported by Fred Schneyer
U.S. District Judge Richard W. Story of the U.S. District Court for the Northern District of Georgia has scheduled a November 15 hearing to consider granting final approval of the pact.
According to court documents, the settlement, minus attorney fees and costs, will be allocated to members of the plaintiff class whose accounts suffered alleged losses as a result of investing in the Beazer Stock Fund between July 28, 2005 and May 12, 2008.
Earlier this year, Story threw out claims that Beazer breached its fiduciary duties by offering company stock as an investment option when it was no longer prudent (see Court Tosses Co. Stock Imprudence Claim).
However, Story gave the plaintiffs permission to move forward with other claims that Beazer also committed a fiduciary breach by not completely informing employees about its true financial condition. The employees claimed that during this time, the stock was an imprudent investment because of the increased foreclosure rate on homes with subprime mortgages.