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Compliance September 7, 2010
General Growth Settles Stock Drop Suit
September 7, 2010 (PLANSPONSOR.com) – General Growth Properties, the second-largest U.S. Mall owner, in the process of emerging from bankruptcy, has agreed to a $5.75-million settlement of a 401(k) stock-drop case.
Reported by Fred Schneyer
Under the terms of the settlement, General Growth’s insurer, St. Paul Mercury Insurance Company, will fund the settlement amount, according to a court document filed in U.S. Bankruptcy Court in New York.
The settlement covers a consolidated class-action suit in which participants claimed the company violated the Employee Retirement Income Security Act (ERISA) by continuing to keep a company stock investment option after it was no longer prudent to do so. Filed in May 2009, the case joined four separate suits over the company stock issue.
Under the terms of the settlement, General Growth agreed to hire an independent fiduciary to be paid by the company or its insurer to provide a separate evaluation of the agreement, according to the court document.
General Growth, based in Chicago, filed for bankruptcy last year after failing to refinance its debt load. The company plans to emerge from bankruptcy this year with $8.4 billion in financing, according to a Bloomberg news report of the settlement.
The court document announcing the settlement is here.