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.
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
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
BellSouth Employee Fiduciary Breach Suit