>US District Judge Rebecca Pallmeyer of the US District Court for the Northern District of Illinois issued the ruling in the lawsuit filed by plaintiff Bruce Howell against the company, its profit sharing committee and a number of its officers and directors. Howell alleged that the defendants continued to buy and hold company stock for the plan after it was no longer prudent to do so and breached their Employee Retirement Income Security Act (ERISA) fiduciary duties.
>While Pallmeyer ruled that the company and some directors could potentially be held liable for the plan’s company stock handling, she threw out claims against plan committee members. There was no way the committee members knew or could have known of risky business transactions that affected the stock, the judge said.
>Howell charged in the suit that the defendants:
- negligently misrepresented and negligently failed to disclose material facts concerning the management of plan assets to the plan and the participants
- failed to appoint appropriate fiduciaries, to properly monitor those fiduciaries, and to provide sufficient information to enable the fiduciaries to fulfill their obligations under ERISA.
>The allegations all related to a vendor financing agreement between Motorola and its business partners, including a contract with a Turkish mobile telecommunications company that exposed Motorola to the risk of a large loss to the company, as well as a liquidity crisis and unspecified problems with at least two Motorola lines of businesses, according to the court.