Law Firm Probing Delta Company Stock Activities

October 12, 2004 ( - A Seattle law firm is investigating whether Delta Airlines violated federal benefits law in its company stock investments through a company retirement plan.

The probe by law firm Keller Rohrback focuses on company stock investments in the Delta Family Care Savings Plan between September 15, 2000 and the present, according to the firm’s Web site.

The firm’s inquiry deals with concerns that the company and plan fiduciaries committed a breach of the Employment Retirement Income Security Act (ERISA) by failing to: “prudently and loyally manage the Plan’s assets by imprudently investing a significant amount of the Plan’s assets in Delta stock; failing to monitor and provide fiduciary appointees with information that the appointing fiduciaries knew or should have known that the monitored fiduciaries needed in order to prudently manage the Plan’s assets; failing to provide complete and accurate information to participants and beneficiaries; and breaching their duty to avoid conflicts of interest.”

The manager of Delta’s Employee Stock Ownership Plan and a separate Delta 401(k) Stock Fund has already cautioned Delta workers from making any more contributions to those funds, citing concern of the “very serious financial difficulties that Delta is currently facing.” 

Independent financial advisor U.S. Trust Corp., which was recently appointed to manage both the Delta Stock Fund and its ESOP fund, sent a letter to Delta employees on August 9 saying it was freezing the Stock Fund and would consider terminating it entirely (See  Delta 401(k) Manager Puts the Brakes on Company Stock Investment ). The Delta Stock Fund is available to employees through Delta’s 401(k) retirement plan, and it invests only in shares of the Atlanta-based carrier. The ESOP fund matches a portion of employee retirement contributions with Delta stock.