Judge Tosses Company Stock Suit
>The federal court in , North Carolina dismissed a suit brought by an R.J. Reynolds Tobacco Company employee following the elimination of two Nabisco stock funds from the R.J. Reynolds Capital Investment Plan (see Participant Says Plan Sold Stock Too Soon ). The Nabisco funds, which the suit charged were sold at a loss, were discontinued as investment options on January 31, 2000, following the June 1999 corporate spin-off that separated RJR Nabisco’s food business from its tobacco business, making them unrelated companies.
>The suit notes that six months after the plan’s sale, Nabisco Group Holdings common stock sold for approximately $30/share, over three times the price the 401(k) plan sold it for on January 31, 2000, while Nabisco Holdings Corporation common stock sold for approximately $55 per share, nearly twice the price the Plan sold it for on January 31, 2000.
>Jack Henson, senior counsel for R.J. Reynolds Tobacco Holdings, Inc., in a press release said, “The court determined that the company acted legally and did not breach any responsibility to any employee in making changes to the plan and following through with those changes once they were announced.”
>The case is Tatum v. The R.J.R. Pension Investment Committee of the R.J. Reynolds Tobacco Company Investment Plan, et al.
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