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Kodak ESOP/Savings and Investment Plan Ruling

On April 22, 2016, a proposed settlement was filed in this class action case in which plan participants alleged that the fiduciaries of the Eastman Kodak Co. ESOP and Savings and Investment Plan violated ERISA by offering Kodak stock after “objective information” revealed the company’s financial duress, and, in turn, the riskiness of the stock as an investment option. The court initially denied the fiduciaries’ motion to dismiss early in the case, on the basis that the participants suffered sufficiently dire circumstances as a result of the claim. The parties in the case eventually engaged in mediation procedures, leading to the proposed settlement of $9.7 million, representing a recovery of approximately 20% to 50% of the total damages allegedly suffered by participants. Legal fees adding up to over $ 3 million could also become part of the settlement, representing attorney’s fees plus reimbursement of out-of-pocket costs.

www.bna.com; Pension & Benefits Daily; April 26, 2016.