According to law firms Stull, Stull & Brody and Izard Nobel LLP, the settlement will provide for a payment of $3 million to the plan (minus court-approved attorneys’ fees, certain expenses and case contribution awards to the named plaintiffs), which will then be allocated to the accounts of participants of the plan. Other than certain excluded persons under the terms of the settlement, the settlement class includes participants who had portions of their plan accounts invested in Flagstar common stock or fund units in the Flagstar Stock Fund between December 31, 2006, and May 2, 2013, inclusive.
Plaintiffs contended in their suit that the defendants failed to prudently and loyally manage the plan’s investments by continuing to invest plan assets in company stock when it was imprudent to do so; failing to provide complete and accurate information to plan participants regarding the company’[s] financial condition and the prudence of investing in company stock; and maintaining the plan’s pre-existing heavy investment in Flagstar equity when company stock was no longer a prudent investment for the plan.
U.S. District Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan used the “presumption of prudence” standard to rule for the bank in April 2011 (see “Bank Wins Dismissal of Company Stock Suit”).
The court has scheduled a hearing December 3 for final approval of the settlement.