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 million. 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 (See BellSouth Employee Fiduciary Breach Suit To Continue).