Bloomberg reports that the employees claim managers of the savings plan breached their fiduciary duty to employees and retirees by investing in Mirant Corp. stock. Mirant, a subsidiary of Southern Co., is now bankrupt.
The suit seeks to represent more than 28,000 employees and retirees and asks the court to force Southern to reimburse millions of dollars in losses, according to Bloomberg.
Several lawsuits were filed in relation to Mirant’s bankruptcy. One retiree alleged that Mirant concealed its “participation in the illegal manipulation of energy prices in California during 2000 and 2001, as well as other irregular and unlawful accounting manipulations tied to energy trading.” (See Energy Retiree Files ERISA Violation Suit ) In another lawsuit, a retirement plan participant claimed Southern Co. and other plan fiduciaries breached their fiduciary duties to plan participants by failing to investigate whether Mirant stock was a prudent investment (See Class Action Sought on Bankrupt Stock Investment ). Mirant lawyers sought to have the case dismissed since plan participants were allowed to transfer out of the fund at any time (See Mirant Lawyers: K Plan Fiduciaries Committed No Misdeeds ).
Meanwhile, Mirant is suing Southern for $1.95 billion saying Southern caused it to incur debt while transferring assets.