A group of 401(k) plan participants today filed a class-action lawsuit against SBC Communications Inc. and Pacific Telesis Group, which SBC acquired in 1997, in U.S. District Court for the Central District of California in Los Angeles, claiming both plan sponsors improperly liquidated their stock in AirTouch PLC, a former Pacific Telesis subsidiary that was performing better than SBC, and transferred the proceeds into SBC common stock.
Plan participants who are suing say that AirTouch stock rose after it was liquidated in 1998, when the company which had been spun off from Pacific Telesis in 1994 was the subject of a bidding war. In January 1999 AirTouch finally was purchased by Vodafone PLC and Bell Atlantic. Meanwhile, their SBC stock holdings declined, according to the suit.
In addition, the participants contend the plan sponsors gave them misleading and incomplete notice of their right to withdraw their AirTouch stock from the 401(k) plans before the stock was liquidated.
SBC Communications officials said the company had not yet formulated its response.