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Pension, 401(k) and ESOP
In recent years, increasing numbers of employers have adopted a practice of reducing or eliminating traditional pension benefits and offering instead 401(k) plans, Employee Stock Ownership Plans (ESOPs), and so-called hybrid plans such as "cash balance" plans. These new plans involve more risk, sometimes far more. When employers freeze, cut, or eliminate your traditional, more secure pension benefits, federal law provides you with important protections. Federal law also requires that employers appoint a fiduciary (or supervisor) to oversee all pension plans, including 401(k) plans and ESOPs. That person must take steps to ensure that decisions are made for the exclusive benefit of plan participants and not for the benefit of the employer, and also must ensure that plan investments are chosen with care. Unfortunately, employees at many companies have suffered dramatic losses to their retirement savings and pension plans, particularly through investments in their own employer's stock, because their plan fiduciaries have not fulfilled their duties.
Our attorneys have been at the forefront of litigation to recover losses to participants in 401(k) plans and ESOPs from imprudent investments in employer stock, years before the Enron and Worldcom scandals brought this problem to national attention. Currently, we are litigation class actions against Wachovia, Regions, First Horizon National and Sovereign Banks. We believe the evidence will show that these entities have breached their fiduciary duties to their employees and retirees by, among other things, failing to properly disclose material information about their exposure to sub prime and other high-risk investments.
A sample of the successful pension, 401(k) and ESOP actions our attorneys have brought include:
If you feel that your pension benefits have been wrongly cut or eliminated, or that your ESOP or 401(k) plan has been improperly managed, or if you feel you have been short-changed when a tradition pension plan has been converted into a cash balance plan, please contact us so that we may evaluate your claim.
If you are an attorney with a client in this position, please consider partnering with Stember Feinstein Doyle Payne & Kravec. We represent referred matters as we represent our own clients, and respect the fact that referred clients have a history of a positive working relationship with the referring attorney. We would be eager to team with you in prosecuting the case. If you prefer, we also can take the lead or act simply as local counsel. We are flexible on fee arrangements, subject, of course, to applicable rules. Under any scenario, Stember Feinstein Doyle Payne & Kravec will provide your client with superb representation.
Our attorneys have been at the forefront of litigation to recover losses to participants in 401(k) plans and ESOPs from imprudent investments in employer stock, years before the Enron and Worldcom scandals brought this problem to national attention. Currently, we are litigation class actions against Wachovia, Regions, First Horizon National and Sovereign Banks. We believe the evidence will show that these entities have breached their fiduciary duties to their employees and retirees by, among other things, failing to properly disclose material information about their exposure to sub prime and other high-risk investments.
A sample of the successful pension, 401(k) and ESOP actions our attorneys have brought include:
DiCioccio v. Duquesne Light Co. - In this case in the Western District of Pennsylvania, we challenged the conduct of Duquesne Light, a large energy company. Duquesne Light offered employees stock options and stock appreciation rights through a long-term incentive plan. When employees exercised these options, the amounts they received were treated as W-2 compensation for tax purposes, but Duquesne Light failed to include these amounts in the compensation used to calculate employees' pension benefits. The court ruled in favor of the employees we represented, and ordered Duquesne Light to recalculate their pension benefits with interest.
In CMS Energy Corp. ERISA Litigation - We brought this class action in the United States District Court for the Eastern District of Michigan on behalf of the 13,000 participants and beneficiaries of an ESOP and 401(k) plan sponsored by Consumers Energy Company, a subsidiary of CMS Energy Corporation. In May of 2002, it was revealed that CMS had inflated sales and revenue by engaging in sham energy trades where the company "sold" electricity but bought back the same amount from the same party at the same price. Plaintiffs asserted that plan fiduciaries violated federal pension law (ERISA) because they knew that CMS stock was inflated in value prior to May 2002 as a result of these trades, and therefore they also knew that the plan and its participants had paid too much for the stock. We obtained a $28 million settlement in 2006.
Presley v. Carter Hawley Hale Profit Sharing Plan - Carter Hawley Hale Stores, Inc. (CHH) owned various department stores around the nation, including Broadway, Emporium, Capwells, and Weinstocks, and had more than 24,000 employees participating in its 401(k) plan. Our attorneys brought suit in the United States District Court for Northern District of California on behalf of CHH employees who suffered losses as a result of their 401(k) accounts being invested in CHH stock, which became worthless as the company's financial condition deteriorated into bankruptcy. We reached a $36 million settlement on behalf of the employees.
In CMS Energy Corp. ERISA Litigation - We brought this class action in the United States District Court for the Eastern District of Michigan on behalf of the 13,000 participants and beneficiaries of an ESOP and 401(k) plan sponsored by Consumers Energy Company, a subsidiary of CMS Energy Corporation. In May of 2002, it was revealed that CMS had inflated sales and revenue by engaging in sham energy trades where the company "sold" electricity but bought back the same amount from the same party at the same price. Plaintiffs asserted that plan fiduciaries violated federal pension law (ERISA) because they knew that CMS stock was inflated in value prior to May 2002 as a result of these trades, and therefore they also knew that the plan and its participants had paid too much for the stock. We obtained a $28 million settlement in 2006.
Presley v. Carter Hawley Hale Profit Sharing Plan - Carter Hawley Hale Stores, Inc. (CHH) owned various department stores around the nation, including Broadway, Emporium, Capwells, and Weinstocks, and had more than 24,000 employees participating in its 401(k) plan. Our attorneys brought suit in the United States District Court for Northern District of California on behalf of CHH employees who suffered losses as a result of their 401(k) accounts being invested in CHH stock, which became worthless as the company's financial condition deteriorated into bankruptcy. We reached a $36 million settlement on behalf of the employees.
If you feel that your pension benefits have been wrongly cut or eliminated, or that your ESOP or 401(k) plan has been improperly managed, or if you feel you have been short-changed when a tradition pension plan has been converted into a cash balance plan, please contact us so that we may evaluate your claim.
If you are an attorney with a client in this position, please consider partnering with Stember Feinstein Doyle Payne & Kravec. We represent referred matters as we represent our own clients, and respect the fact that referred clients have a history of a positive working relationship with the referring attorney. We would be eager to team with you in prosecuting the case. If you prefer, we also can take the lead or act simply as local counsel. We are flexible on fee arrangements, subject, of course, to applicable rules. Under any scenario, Stember Feinstein Doyle Payne & Kravec will provide your client with superb representation.
