CASE SETTLED
On June 5, 2008, the District Court granted final approval to the Settlement. However, on June 23, 2008, a Notice of Appeal from the Settlement was filed with the United States Court of Appeals from the Sixth Circuit. Ultimately, the settlement resulted in $37.5 million for General Motors ERISA plan participants and their beneficiaries in addition to significant revision of retirement plan administration.
Hagens Berman Sobol Shapiro was appointed co-lead counsel on behalf of General Motors ERISA plan participants and their beneficiaries. Plaintiffs alleged that General Motors and other plan fiduciaries imprudently managed the plan's assets, causing employee-owners to incur great losses.
The case concerned two General Motors ERISA Plans - the Personal Savings Plan for Hourly Employees and the Savings-Stock Purchased Program for Salaried Employees - both holding large amounts of General Motors stock. Plaintiffs claimed that despite General Motors' financial problems and the companies plummeting shares, GM and plan fiduciaries ignored these troubles, relying on false projections to mask the extent of the company's financial woes.
The plaintiffs also claimed that the defendants should have acted to protect the ERISA plans and its participants from the losses they incurred.
In addition to the monetary recovery, Settlement Class Members receive substantial additional benefits under the proposed Settlement, including the following: (1) GM will retain an independent fiduciary to monitor the prudence of offering GM stock as an investment in the Plans, which will mitigate against the risk of large losses in the future (2) GM will not make matching contributions in the form of investment in Company Stock, which should lead to greater diversification in the Salaried Plan; (3) GM will maintain upgraded communications to Plan participants concerning the available investments in the Plans; (4) GM will provide a Savings Plan portfolio tool that enables Plan participants to model various retirement scenarios free of charge for one year; and (5) 'Money in Motion,' a one-year financial advisory program from Ayco Company, will be available to all Plan participants at a reduced cost of $30.
CASE TIMELINE
On June 5, 2008, the District Court granted final approval to the Settlement. However, on June 23, 2008, a Notice of Appeal from the Settlement was filed with the United States Court of Appeals from the Sixth Circuit. Ultimately, the settlement resulted in $37.5 million for General Motors ERISA plan participants and their beneficiaries in addition to significant revision of retirement plan administration.
