The lawsuit – which alleged that company stock was held in the employee stock ownership plan (ESOP) after it was imprudent to do so – was originally filed in 2003, according to Reuters. It contended that the UAL Corp. ESOP committee and the plan trustee, State Street Bank, were aware that the stock was unstable yet still held it in the plan.
The law firm for the 70,000 UAL employees said that State Street even put the stock on a watch list due to its volatility, according to Reuters. The law firm asserted that it held the stock, even as it fell prior to the terrorist attacks in 2001 that sent airline company stocks tumbling.
Although no trial date has been set, US District Judge Samuel Der-Yeghiayan granted the suit class action status on Thursday.
“ESOP committee members have a strict and absolute duty to represent the interests of the ESOP investors,” said Steve Berman, the plaintiffs’ law firm’s managing partner, according to Reuters. “We believe that these union members could have had their objectivity clouded by things such as union negotiations with the company, for example.”
UAL has been in bankruptcy since December 2002, with its stock price lingering around $1.20.